Preamble

The House met at half-past Nine o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

Common Fisheries Policy

Motion made, and Question proposed, That this House do now adjourn.][Mr. Conway.]

Mr. John Wilkinson: I must confess, Madam Speaker, that I was not keen on our new arrangements until you generously allowed me the opportunity to raise this morning a subject of the utmost importance to our country—the common fisheries policy. At the heart of our national discontent lies a feeling of impotence, in that an elected British Government can no longer decide our country's destiny in a sense that accords fully with our people's desires, or even with their interests.
In few areas of public policy is that frustration more manifest than over fishing. As in much else, it is the apparent supremacy of the cause of the European Union, alias the "process of European construction", over the welfare of the British people that is to blame. It lies at the root of our beleaguered fishing communities' feeling of alienation and of the wider sense of popular disbelief that any Government of the United Kingdom can any longer protect our natural inheritance of rich fishing resources against the depredations of foreign trawlers, officially sanctioned by what many people regard as an alien power beyond their effective control—the European Union.
If the common fisheries policy were working, I should have no reason to complain. Like many hon. Members, I have a personal interest in its doing so. After all, I voted for our accession to the Common Market in 1971, campaigned in favour of our continuing membership of the European Economic Community in the referendum of 1975, and voted for the Single European Act in 1985.
We all like to think that our past parliamentary behaviour and political attitudes can be justified by events, but if that natural human desire does not accord with subsequent realities, pride must give place to honest acceptance of the facts, and intellectual integrity should be our rigorous guide. I do not believe that in the case of fishing we were right to bind successive Parliaments by assigning in perpetuity our unique insular maritime inheritance, our incomparable wealth and diversity of fisheries, as a common resource to what became the European Union.
It is true that in coastal waters for up to six miles British fishermen alone may fish, that between six miles and 12 miles out, only the boats of European nations with historic rights may compete with our vessels, and that

even beyond 12 miles a joint EU regime does not prevent United Kingdom fishing boats from fishing their traditional waters.
Nevertheless, the common fisheries policy flies in the face of intrinsic logic and of the pattern of fish stock management in north Atlantic waters adopted by northern maritime nations akin to our own. It was lack of public confidence in the conservation measures and fishing control capability of the European Community that contributed to the Norwegian people's rejection in two referendums of their country's proposed accession.
Likewise, the Icelanders, the Canadians and the Greenlanders have found the imposition of a 200-mile exclusive fishing zone to be fundamental to the husbandry of their precious national fishing resources, and to their Governments' efforts to preserve the livelihoods of isolated coastal communities where little alternative employment to fishing exists. I am not naive, and the Canadian experience shows that Canada's policy is no panacea. Job losses in the Canadian industry have been huge. Fishing bans and even unilateral action beyond the 200-mile limit—as with the arrest of the Spanish trawler Estai—have demonstrated the dire consequences of overfishing.
Nevertheless, when the Estai crisis broke, there was no doubt where the sympathies of the British people lay. Their hearts were not with European Commissioner Bonino's efforts to uphold the letter of the international law of the sea on the EU's behalf, but with the enviously regarded, spirited and decisive action of the Canadians in defence of their interests. British fishermen sailed for weeks with the Canadian maple leaf proudly at their mastheads in salute to a friendly national Government who had the courage to see off what they regarded as a common threat—European Union-supported Spanish fishermen operating far from home in waters where historically they have no place.
As my hon. Friend the Member for Ludlow (Mr. Gill)—quoting Cicero—put it so admirably in a letter to my hon. Friend the Fisheries Minister on 23 October,
Salus populi suprema est lex",
or, the people's welfare is the supreme law. That is a classic concept to which electorates rightly expect Governments to aspire, and it should be the guiding principle both of our country's attitude to the common fisheries policy and to the evolution of the EU itself.
Let us examine some basic facts about the common fisheries policy. First, the treaty basis for it is fundamentally flawed, and rests on an assertion in article 39 of the treaty of Rome that the Common Market's agriculture measures shall extend to fisheries. There is no rationale for this, except—as we all know—that the application of the common fisheries policy to the United Kingdom was the quid pro quo exacted by the original six members of the Common Market as Britain's entrance fee to the Community. This historical aberration does not justify the UK's continued participation in the common fisheries policy, especially as decision-making under the policy is by qualified majority voting. That allows even landlocked countries such as Austria and Luxembourg a say, and policy can be potentially decided by horse-trading on extraneous matters rather than on specifically fishing issues which are crucial to the prosperity of British coastal communities and to the interests of the UK economy.
If further enlargement of the EU occurs—to which the British Government are rightly committed—and unless we have first withdrawn from the common fisheries policy, Polish, Bulgarian and other east European vessels will be allowed access to the so-called common resource of fish stocks. Those stocks have been sorely depleted already within what should be Britain's exclusive maritime economic zone to the detriment of United Kingdom fishermen, who have seen their way of life threatened by Spanish and Portuguese fishing boats, following the accession of those countries to the EU.

Mr. David Harris: Spanish boats, mainly.

Mr. Wilkinson: I take my hon. Friend's point. Lest anyone should still allege that horse-trading is a misnomer for the European decision-making process, I remind the House that when the Spaniards threatened to block the entry of Austria, Finland, Sweden and—at that time—Norway to the EU at the Edinburgh summit in 1992 unless Spain and Portugal's full participation in the common fisheries policy was brought forward from 2002 to 1996, the UK capitulated.
Before I make my final recommendations, I must demonstrate how seriously the common fisheries policy is failing. In so doing, I will refer to the House of Lords European Communities Committee report of 1992–93. On the decline in catches, paragraph 2.5 of page 42 of the report states:
The substantial decline in catches over the period of operation of the Common Fisheries Policy reflects the deterioration in the stocks of white fish on which the United Kingdom relies, leading to reductions in Total Allowable Catches and Quotas.
In the case of the 11 species listed—made up of various types of cod, haddock, saithe, whiting and plaice—the total allowable catch in 1982 was 868,010 tonnes, which had fallen by 1992 to 495,750 tonnes. The United Kingdom's quota in 1982 was 426,570 tonnes, which had fallen to 207,825 tonnes in 1992. The report commented:
The volume of these species available to the Community fleet in 1992 is 372,260 tonnes less than in 1982—a drop of 42.9 per cent. The volume available to the United Kingdom fleet has declined by 218,745 tonnes—a drop of 51.3 per cent.
I move on to the question of landings. Page 41 of the report states that the figure for demersal landings in 1982 was 448,000 tonnes, but that the figure had fallen 266,500 by 1990. In the case of pelagic landings, the drop was less marked, but the figure did fall from 301,300 in 1987 to 256,900 in 1990. There is clear evidence of a serious decline of stocks, and the nature conservation committee established by the Environmental Protection Act 1990 made some very interesting comments on this matter to the House of Lords Committee.
The nature conservation committee said that the common fisheries policy
which is the basis for regulating fisheries in EC waters, appears to have no clearly stated objectives, depending instead on those of the Common Agriculture Policy which since they address cultivation are not particularly relevant to hunting of fish. This lack of specifically directed objectives appears to result in a political rather than a scientific emphasis on the management of fish stocks.
The CFP appears to have failed to maintain many important commercial fish stocks in the EC's waters. The size of the stocks of the primary commercial species, such as those of cod and haddock,

are at an historical low … 'Total Allowable Catches' as applied in the EC appear to have proved unsatisfactory and relatively ineffective for several reasons.
The nature conservation committee's remarks continue by stating that one of the reasons why the policy is not working is the pernicious practice of discards, whereby species in excess of the quota are thrown back into the sea dead, and the House of Lords Committee had much to say about that practice on page 27 of its report. The conservation regime is being circumvented by the procedure of quota-hopping, whereby the European Court, no less, has—as usual—proved to be the nigger in the woodpile. The Factortame judgment overturned British law and enabled Spanish interests to buy into British operating concerns, as my hon. Friends who represent Cornwall constituencies will no doubt testify.

Mr. James Wallace: That is an important point. It is a matter of concern. The hon. Gentleman says that Spanish skippers and vessels have been buying into United Kingdom stocks. Does he agree that every buyer must have a willing seller, and that the stocks must come from British fishermen? Does he understand why in France, for instance, the same kind. of transactions have not taken place?

Mr. Wilkinson: I agree. British fishermen believe that they had better get out while the going is good. They recognise that the common fisheries policy allows no long-term future for them in the industry and that they had better realise their assets, even if it means selling them to Spanish interests, as soon as possible. As to what happens in France, I have no specific information.

Mr. Keith Mans: If that is the case, what is in it for the Spanish? We are all in the common fisheries policy, so why should they be buying up those vessels?

Mr. Wilkinson: I imagine that the Spanish fishermen want to maximise their catch on a short-term basis, which is their traditional manner of operation, before they move on to what they regard as more profitable fishing grounds elsewhere

Mr. Christopher Gill: Further to the intervention from my hon. Friend the Member for Wyre (Mr. Mans), I wonder whether the hon. Member for Ruislip-Northwood (Mr. Wilkinson) would be interested in the contents of a letter from someone in Portugal whom I have consulted about fisheries there. He says:
As far as the fishing sector is concerned it is one of the worst hit sectors of our economy … The situation is becoming explosive. Fishermen are being paid to stop fishing because the Spanish fishing fleet has more competitive production costs.
Is that not the answer to the question asked by my hon. Friend the Member for Wyre and possibly that of the hon. Member for Orkney and Shetland (Mr. Wallace)?

Mr. Wilkinson: That is indeed the answer. I am most grateful to my hon. Friend the Member for Ludlow, who speaks wisely and with great experience in these matters.
I hope that the House will agree with me that the common fisheries policy is fatally flawed and that it offers no hope of preserving essential fish stocks or of securing sustainable employment for the fishing communities around our coasts. The principal fishing communities are, of course, in the most remote parts of the kingdom, and decommissioning grants from the European Union merely exacerbate an


injury which EU-sponsored policies themselves have already inflicted. The cruel irony is that British taxpayers' money is necessarily involved in the process.
Instead of showing a continued dispiriting acquiesence to the acquis communautaire on the common fisheries policy, Her Majesty's Government should use the forthcoming intergovernmental conference to issue a declaration of intent to our European Union partners that the United Kingdom proposes to withdraw from the common fisheries policy and declare a 200-mile exclusive fishing zone around its coasts. Where propinquity to neighbouring countries precludes that, the median line will constitute our national fishing limit. Naturally the United Kingdom would consider carefully any applications for bilateral fishing agreements on an equitable basis with other countries, be they EU members or otherwise.
Those proposals should be put to the British people for their endorsement in the Conservative party's manifesto for the forthcoming general election as the first stage of a carefully considered Conservative process of recuperation of powers and competences from the institutions of the European Union to the British judiciary, Government and Parliament to help create a European Community of sovereign states in which the national interests of the participating countries are fully safeguarded. I believe that the British people would regard those proposals as courageous and fair, and they would be relieved that at last they had a Government who shared their common aspiration that the United Kingdom should remain proud, independent and free. Our brave fishermen would also have found an effective champion at last.

Mr. Austin Mitchell: I congratulate the hon. Member for Ruislip-Northwood (Mr. Wilkinson) on securing this debate and on the strength and vigour with which he has put an argument which is extremely strong and very difficult for Ministers to rebut. I have no doubt that they will try to do so, but it is an argument that is impossible to rebut because the common fisheries policy has been a disaster for Britain and it was always intended to be such.
The principle of equal access to a common resource is the basis of the common fisheries policy. The policy was stitched together a matter of months before the British application for membership. It was deliberately designed to obtain access for European fleets which had outfished their waters to the rich fishing waters around the British coast. The principle was misguidedly accepted by the then Prime Minister in his impetuous rush to get into Europe. He was perfectly prepared to sacrifice the interests of a small and, to him, unimportant industry to get at the major point, which was membership of Europe.
Half of the fishing industry protested loudly. The inshore fishing industry saw what was coming and saw that the intense competition would drive it out of business. The big boys—the distant-water fishing fleet—were preoccupied with Iceland. They thought that they would be able to continue catching enormous quantities of fish in Iceland. So they thought that European waters were of no importance to them. Therefore, they made no particular protest.
So the industry was effectively not consulted. The national interest was not consulted. We were pushed into a situation in which we contributed more than 75 per

cent.—let us say three quarters for convenience—of the major stocks of the so-called common market pool. That three quarters was in British waters. We were given a small catch, perhaps a quarter of the total catch—less by value—in return for our enormous contribution. That was a massively unfair principle. It produced the consequence that it was impossible to do what was logical in the 1970s when Iceland took its 200-mile limit and started the trend to 200-mile limits. It was impossible to follow suit by taking our territorial limit to 200 miles or the median line and redeveloping and rebuilding our fishing industry in our own waters. That was the logical thing to do. That was what everyone else did.
Although it is true that other countries now suffer problems of overcatching, it is also true that only the nation state has an interest in building up and conserving its stocks because only the nation state has an interest in handing them on to future generations of its fishermen. That is in no one else's interest. Other countries want to fish them out as a disposable resource and keep over-large industries going.

Mr. Mans: Let us get the record straight. Is it not right to say that when the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) was responsible for fishing matters in the 1970s, he was offered 64,000 tonnes of fish by the Icelandic Government, but turned it down because he wanted more? As a result we got nothing. That is one of the main reasons why our deep-water fleet has ceased to exist in international terms.

Mr. Mitchell: It may be convenient for the hon. Member for Wyre (Mr. Mans) to blame the demise of his distant water fleet on my right hon. Friend the Member for Birmingham, Sparkbrook, (Mr. Hattersley), but the facts are different. If the hon. Gentleman wants to read about the matter, he will find in next week's issue of The House magazine an article—if I can give it a plug—written by the hon. Member for Great Grimsby which details what happened in those negotiations. The offer of 68,000 tonnes for a limited period was turned down at the insistence of the industry. Not the Government but the industry insisted that it wanted more. It wanted more than it had the capacity to catch. That was a foolish negotiating move by the industry. That was the reality. Therefore, it is unrealistic to blame the Labour Government. I do not want to go into the history.
The abdication of British rights to control British waters by the Government of the right hon. Member for Old Bexley and Sidcup (Sir E. Heath) was the crucial factor in preventing us from following up our loss by building up our own fishing industry in our own waters, which are the richest in the world. That was the crucial failure. We would do better to do what is obviously in our interests, which is to catch our own fish and land them here, rather than doing what we are doing, which is to allow other people to catch our fish and sell it back to us, getting the jobs and profits.
The argument that is usually put forward, that fish migrate, is fallacious. Most of the stock breed, live and are caught in our waters. Only a minority of species move about. It is stupid to suggest that European countries might catch those while they are young and immature just for the sake of spiting a British Government who take control of their own waters. It might apply to the Spanish, but not to anyone else.
The fact is that we should come out. It is in our interests to do so. It is in the interests of the British fishing industry and it is straightforward. All that we have to do is to provide that the European Communities Act 1972 does not apply to the Fishery Limits Act 1976 and revoke the licences given to vessels from specified European countries to fish in our waters under that legislation. Parliament cannot bind itself and a present Parliament can easily provide that the legislation shall not apply. The mechanics of doing so are very straightforward, even simple.
The question is whether we have the will to do so. Have Ministers got the will and the determination to do it and to face up to the confrontation that will inevitably result? That is the real area of doubt. I do not think that Ministers have that will. Even in the present situation, they are always overruled when it comes to European negotiations. The interests of the fishing industry are always sacrificed to gain some so-called higher good for the Government. That is what happens and it has happened repeatedly. The present Minister is heir to that long legacy of betrayal of the interests of fishing because something else is more important to the Government.
The hon. Member for Ruislip-Northwood gave the classic instance—the desire to get Norway and the other states in, which led the British Government to overrule fisheries Ministers and give the Spanish access to the common fisheries policy six years early. It was a fallacious desire in the case of Norway and we gave the Spanish full status early.
That is a constant pattern. It is only the most flagrant example of what has been going on for years. Frankly, rather than defending and justifying the common fisheries policy and pretending that we derive benefits from something that manifestly does damage, it would be more intellectually honest and convincing to the House if Ministers gave us an honest picture of the position and said that the advantages lie with coming out, but that they have not got the will to do it.
We certainly do not gain anything from this common fisheries policy. Ministers' usual argument is that we have access to markets for our fish, as if it will be turned away from European markets. The world is desperate for fish and it is inconceivable that the Community would block British fish going to Europe if we did the logical thing and caught our fish with our vessels, landed the catch here and sold it on European markets. Access would certainly not be refused; it could not be.
So, that is a stupid argument and it shows a grovelling intellectual attitude towards Europe. We always abdicate our case. We do not recognise the realities and we always start negotiations from a very weak position. We are negotiating on our knees, saying, "Yes, yes. The common fisheries policy is wonderful," and asking what little change or benefit can be given to us by moving the goalposts in a common fisheries policy that, frankly, is disastrous for this country.
We should recognise realities because the crunch is coming. There will have to be a massive reduction in the British fishing effort because we are well over our multi-annual guidance programme targets—further over than anyone else. That will force Ministers to enforce a massive reduction on the British fishing industry. Yet, we

are the nation with the stocks and the waters—the nation that contributes everything to that policy, to make room for Spanish vessels.
That reduction will be forced on us by European overfishing and by the principle of equal access to a common resource, which has decimated our stocks. Because of that decimation, Ministers will have to close large sections of the British fishing industry and that is a monstrous thing to do to this country.
The second crunch that is coming is the same one as applied with Spain—the principle of nations coming into the Community with huge fishing fleets, but no waters to contribute to the common fisheries policy, whose demands are satisfied at our expense, in our waters. That has already happened with Spain. Ministers have supinely given way to that monstrous principle.
This country is now anxious to turn the European Union into some sort of continuous rolling row and to weaken and dilute it by bringing in a confused babble of other states. We are now pressing the cases of eastern European states, many of which have huge fleets but no waters in which to catch the fish. On the principle of equal access, they will have a claim to fish in British waters. How are we going to resist them? We could not resist that claim in Spain's case. When Bulgaria, Poland, Estonia, Latvia and Lithuania come in with their fishing fleets, what will be our answer? That will break the common fisheries policy.
It would be intellectually honest and much more acceptable to the House if Ministers said this: although a disaster is looming, we have certain strengths in that we contribute waters and that we are prepared to take a tough stand for Britain; we will do that and, if it risks putting us in an exposed position, we will come out. That is the only ultimate safeguard for our fishing industry and that is the intellectual position that I want Ministers to take.

Mr. David Harris: I am sincerely grateful to my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) for initiating this debate. Some hon. Members may think it odd that some of my hon. Friends who represent constituencies many miles from our coastline are here for the debate. I see my hon. Friends the Members for Billericay (Mrs. Gorman), for Ludlow (Mr. Gill) and for Boston—

Sir Richard Body: Boston?

Mr. Harris: I am sorry.

Sir Richard Body: May I draw my hon. Friend's attention to the fact that we still have 40 boats left, although we used to have many more. We also used to have a fish processing industry, which has now gone to the Netherlands because the Dutch Government are more vigilant on behalf of the fishing industry than are our Government.

Mr. Harris: I apologise profusely to my hon. Friend, if he will now contain himself. I made the crucial error of lumping him in the same category as other hon. Members who perhaps look at such matters from a different perspective from those of us who represent constituencies along the coast. I recognise their genuine concern about the common fisheries policy and very


much welcome their interest in the subject because it is part of a process that has brought to the fore the crisis in the fishing industry.
I welcome support from all sources in the process of making the House, the Government and the European Union face up to the crisis that our fishermen face. I was absolutely delighted, as were my constituents, when, yesterday, His Royal Highness the Duke of Cornwall visited Newlyn in my constituency and spent the morning considering the problems of the fishing industry and talking at length with the people who really matter—those who work in the industry, such as fishermen, fish merchants and harbour commissioners. That is a part of the one good thing that has come out of this crisis during the past few years, which is heightened interest in it. People are at last paying attention to the problems of the fishing industry, and that is good.
I must say a few words on the speeches of the hon. Member for Great Grimsby (Mr. Mitchell) and of my hon. Friend the Member for Ruislip-Northwood, who initiated the debate. We are all a little in danger, if not of rewriting history—although I agree with much that my hon. Friend said—then of forgetting how certain aspects of the problem, such as the common fisheries policy, came about.
The hon. Member for Great Grimsby is right: the fishing industry was a pawn in our negotiations to enter the European Community or, as it was then, the Common Market. I recognise that, and I speak as somebody who would like to regard himself as pragmatic, down-to-earth European.
The hon. Member for Great Grimsby referred to the deep-sea fishing industry. It is nowadays overlooked completely—perhaps it is forgotten—that, when we were going into Europe, the deep-sea fishing industry pressed the principle of open access and, with respect, it was not for the reason that the hon. Member for Great Grimsby gave. It was because, having lost its rich fishing fields around Iceland because of the 200-mile limit, the industry thought that it would be able to gain access to what are now Norwegian waters.

Mr. Austin Mitchell: rose—

Mr. Harris: I shall not give way because we are all pressed for time. We can discuss it afterwards. I could give the hon. Gentleman chapter and verse from a book on the history of the common fisheries policy.
My hon. Friend the Member for Ruislip-Northwood was right to say that exclusive control over what we like to call our waters would not in itself solve the problem. He mentioned Canada, which has had 200-mile limits. Canada fished out a lot of its shoals although it had exclusive control over those waters.
I had the good fortune, as a member of the Foreign Affairs Committee, to go to New Zealand. I took a little time off from foreign affairs matters to go to the Ministry of Fisheries to see how it managed its 200-mile zone and its system of individual transferable quotas. They have problems and disputes in New Zealand. Indeed, when I was with my colleagues in the Parliament in Wellington, an almighty dispute broke out which involved representatives of fishermen from Chatham island complaining about other boats coming into their waters. They happened to be New Zealand boats. There have always been disputes between fishermen and there always will be.
My hon. Friend the Member for Ruislip-Northwood also mentioned Iceland. I had the pleasure, I think with the hon. Member for Great Grimsby, to give lunch to the deputy director of research for maritime resources in Iceland. He told us that although Iceland started the process of claiming 200 miles, it still had huge problems of overfishing inside its waters and that there is now a considerable movement in Iceland to extend the 200-mile limit. Please, please let no one think that even if we could regain control of our waters, it would solve all our problems. The hard fact is that practically every nation in the world is overfishing because of new technology—new means of locating fish, new sorts of gear and the power of engines.
We can argue about the common fisheries policy, of which I am no friend. As has been said, the way that it was forced upon us was deplorable. I regret bitterly many aspects of the common fisheries policy, but if it was scrapped tomorrow, there would still be problems in the fishing industry and the resolution of those problems would involve huge pain and difficulties for our fishermen.
I shall now deal with the simple case that we can withdraw from the common fisheries policy as easy as anything. The hon. Member for Great Grimsby said that the mechanics are simple and straightforward. I agree with him about that in respect of withdrawal, but the repercussions of unilateral withdrawal would be immense. I wish the hon. Member for Great Grimsby, my hon. Friend the Member for Ruislip-Northwood and others who advocate unilateral withdrawal would be honest and open and say what they really believes: that we should withdraw and that if we do not get our way, we should withdraw from the European Union. [HON. MEMBERS: "That is not what we are saying."] That was not what was said, but it would be the consequence.

Mr. Wilkinson: Will my hon. Friend give way?

Mr. Harris: I will not give way because we are pressed for time and other hon. Members want to speak.
I shall tell the House what would happen, as night follows day, if we tried to withdraw unilaterally from the common fisheries policy. Despite what the hon. Member for Great Grimsby said, there would be an immediate backlash and the 90 per cent. or so of the fish that are exported from Newlyn to France and Spain—certainly the element that goes to Spain—would be stopped by blockades overnight.

Sir Richard Body: Rubbish.

Mr. Harris: My hon. Friend can shout, "Rubbish" but that is what the immediate consequence would be. I do not say that a blockade would continue for ever and a day; I doubt that it would. In the long term, the hon. Member for Great Grimsby may be right. I know the Spanish fishermen pretty well.

Mr. Gill: Will my hon. Friend give way?

Mr. Harris: No, I shall not. I know Spanish fishermen pretty well and, as the hon. Member for Great Grimsby also knows, there would be immediate retaliation, at least in the short term.
Further, if we stayed in the European Union, we would be taken to the European Court. My hon. Friend the Member for Ruislip-Northwood referred to the perverse


or diabolical judgment of the European Court in the Factortame case, over which the House was overruled. That was something for which I had been fighting long before many in this House showed any interest in fishing—doing something about the curse of the flag of convenience vessels.
One does not have to be an international lawyer to know what would happen if we withdrew unilaterally from a treaty with which we have at least gone along. It is one thing to negotiate an opt-out from a future European policy, but what is being proposed today is that we should withdraw unilaterally from a policy to which we have been party for many years. We would be challenged in the European Court and there is not the slightest doubt that we would lose. Hon. Members who advocate such a course should argue that we should stand up on the issue and then, if necessary, withdraw from the European Union. That at least is a tenable position. I disagree with it, but it at least has some sense and one could argue it. The suggestion that we can, without consequence, withdraw unilaterally from the common fisheries policy is absolute nonsense and does great damage to the fishing industry because many people buy that line without realising the consequences.
What should we do? There is a problem of great importance to constituencies such as mine. If I may refer again to the visit of His Royal Highness yesterday, the message of the fishermen of Newlyn was that they cannot see a future for the industry given the way things are going and with the pressure for reductions of our quotas. There is the cursed business of the Spanish. Indeed, on 1 January, Spanish boats will come into waters from which they were previously excluded—some of the waters of the so-called Irish box. What should we do about the consequences that will flow from that?
When the decision was taken on 22 or 23 December last year to allow the Spanish into those waters, I learnt a severe lesson. On that day, in the face of every conservation argument, the decision was taken to allow extra boats into those waters—rich fishing grounds for our boats—from January 1 next year. That was done because of the system of qualified majority voting. We were outvoted. Indeed, our Minister made a grievous mistake, in my estimation, when he only abstained. That would not have made any difference in the end, however, because all the other member states voted for the deal that emerged and we were left isolated. That must not happen again when we renegotiate the common fisheries policy in 2002. That is the big danger which has not been mentioned in the debate today.

Mr. Gill: Will my hon. Friend give way?

Mr. Harris: No, because I am pressed for time. I am sorry. I hope that my hon. Friend will catch your eye, Mr. Deputy Speaker.
The danger is that, with the renegotiation of the common fisheries policy, which has to be done by 2002, we might have to face true open access and the abolition of all the fishing rights that we now have. That would mean the end of the fishing industry as we know it.
The first thing to do—I have been pleading with Ministers about this behind the scenes for a long time—is, as part of the intergovernmental conference, to make a

determined attempt to restore the national veto. I know that the Liberal Democrats want to abolish the national veto. We must make a serious and determined attempt and we must make it a sticking point that we restore the national veto on the final outcome of the renegotiations of the common fisheries policy in 2002. That is the most practical and urgent task we can set ourselves. It is also the most important. There are many other things that we could do, but I do not have time to go into them now.
I plead with my hon. Friend the Minister of State, as I have pleaded, dare I say it, from the top of the Government down, that that task should be our objective. If we do not succeed in that objective and if we end up with a common fisheries policy that allows open access, our fishing industry will never forgive the House.

Mr. James Wallace: I endorse the congratulations to the hon. Member for Ruislip-Northwood (Mr. Wilkinson), who has done the House a great service by introducing this debate. It adds to the number of fisheries debates that we have in the year and it addresses an issue that raises considerable interest. Those of us who, over the years, have regularly attended fisheries debates welcome the interest that is now being taken by hon. Members who represent non-fishing constituencies in the common fisheries policy.
The hon. Member for Ruislip-Northwood conceded that he supported the terms of accession in 1971. I suspect that he did not then speak up for the fishing industry, which was making representations that it did not believe that the arrangements were fair. The renegotiations by Harold Wilson's Government did not take the fishing industry's interest into account either. We have suffered from the fact that, by its nature, the fishing industry is scattered around the coastal areas of the United Kingdom. It has not had the collective clout to put fishing issues to the top of the agenda. That is a historical matter. If we had a Scottish Parliament and regional assemblies in England, fisheries would loom far larger in the economies of those areas and would be an issue that Governments could not ignore as readily as they have.
I cannot accept that the simple solution proposed by the hon. Members for Ruislip-Northwood and for Great Grimsby (Mr. Mitchell)—that with one bound we are free from the common fisheries policy—is tenable, for many of the reasons advanced by the hon. Member for St. Ives (Mr. Harris). We can leave the common fisheries policy either by agreement or by a unilateral measure. I do not see for the life of me how by leaving the CFP we could get a better deal than by staying in it and seeking reform. A unilateral decision would have industrial consequences, which the hon. Member for St. Ives mentioned, legal consequences and political consequences. If nations in the European Union that have entered into treaty agreements start picking and choosing the ones with which they will continue and those which they will abrogate, it will be the start of the collapse of the European Union as we know it. If the Conservative Members who argue for that were open enough to say that that is what they want, the intellectual credibility of their argument would be greatly enhanced.
Some say that we should move towards the abandonment of the common fisheries policy. I do not believe that that is a solution either. It has already been


said the fishing industries of countries with 200-mile limits have not prospered—one needs only to read the large section in this month's National Geographic on the perilous state of fish stocks in many parts of the world or Newsweek of 25 April 1994 to realise that. The article says that with the increase in territorial seas from 12 miles to 200 miles,
The hope was that coastal states, angry at overfishing by foreign factory ships, would take a protective interest in the fishing grounds under their vastly expanded domain. Instead, they rushed to plunder the saltwater bounty, offering generous subsidies and tax breaks for new fishing vessels.
The article then points out:
In Atlantic Canada, the collapse of cod now threatens the survival of hundreds of fishing villages … More than 500 small villages on Russia's Pacific coast are similarly threatened by overfishing of pollock.
Earlier, the article states that even where there are 200-mile limits
every valuable fish that straddles or migrates across this border has been hit hard by foreign fleets".

Mr. Austin Mitchell: Will the hon. Gentleman give way?

Mr. Wallace: No; I shall allow more hon. Members to speak if I restrict my remarks.
Increasing national limits is not a guarantee of success in containing overfishing.
If we abandoned the CFP, fisheries policies would be in the hands of the United Kingdom Government. The hon. Member for Holland with Boston (Sir R. Body) made an interesting intervention in which he pointed out to the hon. Member for St. Ives that the fish processing industry in his area had disappeared and had gone to the Netherlands because the Dutch Government were more vigilant in looking after their interests than were the United Kingdom Government. The Netherlands is, of course, within the common fisheries policy and is subject to the same rules. That suggests to me that we should make a clear distinction between what, at times, are problems of the common fisheries policy and what, at other times, are problems caused by a lack of vigilance and a lack of proper attention to fisheries over many years by our Government.
The fishing industry was not very happy with the days at sea legislation proposed by our Government. Sir George Younger, who was Secretary of State for Scotland when the CFP was being negotiated in 1983, advised fishermen in my constituency that, in addition to the Shetland box, special regard would be given to the representations made by the Shetland Fishermen's Association and the Orkney Fishermen's Association when framing inshore fisheries legislation. The legislation, however, proposed a limit of six miles, to which the inshore fisheries legislation applies and which is purely in the hands of the United Kingdom Government. The recommendations from my local fishermen's associations were ignored. There is no guarantee that repatriation will deliver any better a deal for fishermen than we have seen in recent times.
We must adopt a much more vigorous approach on behalf of the fishing industry. To be fair, the previous Minister, the hon. Member for Fylde (Mr. Jack), took a greater interest in fisheries than any of his predecessors,

and the present Minister seems to take such an interest as well. Fisheries are an important issue on the agenda of the House and on the agenda for negotiations in Europe.
I suggest that we look forward to fundamental reform within the European Union. We should appreciate and accept that the negotiated deal on relative stability was, in many respects, good for the United Kingdom. It has been undermined by the flagging out of vessels and we have not fully understood how many other countries have managed to avoid the same loss of fishing vessels. We have fishing vessels that fly the British flag, but which, de facto, belong to other nations. It is always difficult to say that one is right after the event, but if the advice of those of us who advocated a regional system of licensing to try to ensure that licences remained with communities dependent on the fishing industry had been heeded when licensing was introduced in 1984 or 1985, some of the problems might not have arisen.
Some of the present arrangements are almost contrary to the principle of relative stability. In many respects, the hon. Member for St. Ives used the right word. The Factortame judgment was perverse and it does not sit alongside the principle of relative stability.
In any reform, we want to ensure that those principles of relative stability are retained. We also want some clear assurances that the derogation from equal access will be extended. With my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood), I visited the Commission in Brussels last week. We had discussions with Mr. Alain Laurec and others. Our impression was that no country has actually pushed for or raised the idea of abandoning that derogation. If Ministers could give an early confirmation of that, the industry would be greatly reassured.
Perhaps we should take a more regional approach to fisheries. The example has been given of the Clyde herring fishery, which is 100 per cent.—or at least 98 per cent.—operated by British vessels. In many respects, there is no reason why decisions affecting that fishery should go to Brussels for approval when they affect only United Kingdom fishermen. We should examine the possibility of decisions on Mediterranean fisheries being made by member states with Mediterranean interests, and the same for the Baltic and the North sea.
A more regional dimension to the common fisheries policy would mean that management decisions affecting an area of 12 to 200 miles would involve the fishermen and member states of those fishing vessels that have historic fishing rights in those areas. Land-locked Austria would not then make decisions on such detailed matters.
We must face the fact that as we move to the next round of multi-annual guidance programmes, Britain will still not have reached the targets set by the present one. In such a short debate we cannot go over the history of why decommissioning was not introduced earlier, and with more money. At this point, we would like to know what the Government's attitude is to the fact that the European Union is providing very little funding to build new vessels. I understand that from the European Union's perspective, as we have not reached our present target, the allocation of more money would be difficult to justify, but the aggregation of licences might allow for new vessels on a scrap-and-build basis so that our fleet does not grow older and less efficient.
Technical conservation measures must have a place. Square mesh panels, which have been the subject matter of many debates in the House, seem to have taken a back seat in discussions on conservation.
I welcome the announcement that the Minister made last week on the involvement of fishermen in the discussions that will lead to the setting of TACs for next year. In last year's European elections, I put forward a policy paper that suggested that fishermen, scientists and Government officials should be involved. Any system that involves fishermen in setting TACs is more likely to command consent and respect.
The common fisheries policy should comprise a host of other detailed matters. I welcome the review group and look forward with interest to the outcome. The year 2002 will come upon us sooner than we think, and we must begin to put in place the measures that we want to see by then.
The IGC has been mentioned, and my colleague the Member of the European Parliament for Cornwall and Plymouth West has argued for the common fisheries policy to be on the agenda. He has not had much support from Conservative or Labour Members of the European Parliament. The key issues that are worrying many countries must be tackled in the next seven or eight years and should be highlighted as early as possible.
Those of us who represent fishing communities recognise that, in some parts of the world, fishing is one of the few opportunities for economic activity. The common fisheries policy should be much more oriented towards sustaining fishing communities, which provide important employment; not just offshore in the catching fleet, but onshore in processing and, ultimately, in marketing.
Proposals to abandon the common fisheries policy are politically dangerous and naive, but much more needs to be done to reform it substantially. [Interruption.] The hon. Member for Great Grimsby may laugh, but there is a fundamental difference between abandonment and reform. We can go forward with confidence only within the European Union, because fish do not recognise international boundaries.

Mr. David Porter: I congratulate my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) on securing this debate. He and I attended the same fringe meeting at Blackpool last month, which was attended by 400 people. Apart from the meetings addressed by my right hon. Friend the Member for Wokingham (Mr. Redwood), that meeting had the biggest attendance of any fringe meeting.
It does not take a genius to realise that the common fisheries policy has failed to conserve fish stocks. If fishermen catch anything outside their quota, they have to discard it and throw it overboard dead. How does that help conservation? A Shetland skipper recently described how a young lad, on his first trip, wept as 10 tonnes of prime fish were dumped dead back into the sea, simply because that vessel had no licence for the particular species.
I have always likened the common fisheries policy to a raft that does not float properly. Each year, a new piece of bureaucratic nonsense is bolted on to try to keep it afloat. Eventually, the raft will sink and take most of British fishing with it. It would be better to get off now.
The official line is often that in a mixed fishery nothing can be done. That is not true. Successful selective gear is being developed in other countries, and their method of management has changed to stop immoral practices. The rape and pillage of the seas takes place even in the third world, where the European Union buys fishing rights at vast expense. In some areas, European Union vessels have been thrown out of fisheries because of the damage that they have caused. Local fisheries have then reverted to local country control and marine resources have recovered significantly.
Brian Tobin, the Canadian Fisheries Minister who visited the United Kingdom this summer, said:
Conservation is now the watchword of people everywhere.
The recent United Nations conference on fishing highlighted two points: the importance of fishing to coastal communities around the world and the need to work together to maintain the tremendous resources of the oceans. However, the common fisheries policy of the European Union, as implemented in this country, has become so rigid that it is scarcely possible to make a living legally, much less co-operate to conserve fish stocks.
The common fisheries policy encourages law breaking. Our industry has proposed many ideas for sensible management in the past few years. Not all of those ideas have yet been considered by the Government. Fishermen who want to conserve can reap no benefit under the CFP. If they stop killing the small fry and stop dumping mature fish into a stinking, rotten mass on the sea bed, the preserved stocks just go back into the great European pool.
The driving force in the market is the southern states, whose traditional cooking and eating habits require small juvenile fish. Therefore, as those fleets come through our back door with their armadas, they scoop up the juvenile stocks that British fishermen are trying to preserve. The common fisheries policy is therefore a disincentive to conservation. Potentially, if left to run, it will destroy a renewable food supply that is more valuable over the years than even our gas or oil reserves, and will have devastating consequences for the social fabric of our coastal communities. That is criminal.
A Conservative Member of the European Parliament who lost his seat at the last Euro-election told me many years ago that if we did not have the common fisheries policy, we would have to invent it. Surely, if we were starting again, we would not start with the premise that the seas are a common resource open to all, unless we were Euro-fanatics or my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath), or both. We would start from the premise that British fishermen have a historical, economic and cultural right to fish British waters and then do bilateral deals, as appropriate, with our neighbours. We would not, as the Government did in Lowestoft this year, swap North sea plaice with the Dutch in exchange for soles that were then given to the south-west—a quota that those fishermen cannot probably take up in full. That meant that £1 million worth of plaice went out of Lowestoft this year. Following scientific evidence, the likely TACs for next year will mean a 47 per cent. cut in North sea plaice.
As recently as yesterday, I had a very constructive meeting with my hon. Friend the Minister of State and some fishermen from Lowestoft. I understand my hon. Friend's dilemma: does he set the quota high enough to allow fishing to continue and risk there being no fish in two years' time, or does he ignore scientific advice and listen to what fishermen are saying?
The Commission has determined a target size for the European fleet and Britain has accepted the British share of that fleet reduction. Thousands of fishermen have lost their jobs, and more will follow; that is European Union policy.
Quotas, fuel and tux, salaries, bureaucratic procedures and unfair competition from our partners make our fishermen bankrupt, and they are then told that some of them can apply for money to retrain. What do they retrain for in parts of the country where unemployment is already high? They can move away, but where do they move? It is madness.
Fishermen following lines of generations born and bred into the job, simply want to fish. In any local family in Lowestoft, one can find that, dating from one, two or three generations previously, there is fishing in the blood. Those people are not being allowed to fish a manageable and renewable resource because of a wider, sinister European agenda. It is a national disgrace, and the sooner we get out of it, the better.

Mr. Elliot Morley: I add my congratulations to the hon. Member for Ruislip-Northwood (Mr. Wilkinson) on initiating this important debate. Obviously, many issues relating to the common fisheries policy need to be considered and acted on by all parties, especially the Government.
Obviously, people approach that issue from several different directions and there are many different agendas in the debate. Although there is a very significant issue relating to the CFP which must be considered, the CFP should not be used as a vehicle for those people who wish to attack the principle of the European Union without recognising the CFP's role.
I was one of the people who voted against membership of the European Union and campaigned accordingly, but I do not believe that any Member of the House seriously believes that we intend to withdraw from the European Union. It will not be on the agenda.
My opinion, and that of the Labour party, is that we must work in the European Union for the best interests of our country and our communities. That can be done by taking a positive and constructive approach, which means that on occasions there will be disagreements with other member states; it cannot be done by taking a negative and isolationist approach, which I am afraid has been all too common in sections of the Conservative Government.
The demand for a 200-mile exclusive fishing limit is attractive. In an ideal world, if we could achieve that, no one would disagree with the object. However, I do not believe, with the greatest respect to those people who have been leading such a campaign, that it is a credible or achievable object, for reasons that have been outlined in the debate. There would be great problems with that.
Even if we adopted that position, we would be negotiating with other North sea states with traditional historic fishing rights in the North sea, and those 239912 K

negotiations would be extremely difficult. Trade-offs would be inevitable. I do not deny that trade-offs took place in the negotiation for the original CFP, or that some of the principles behind that have been to the advantage of the fishing industry.
Nevertheless, the CFP has certain advantages. I also draw attention to the fact that the 1980s was a time of great prosperity for the United Kingdom fishing fleet and no complaints were made about the CFP at that time, when the fleet was expanding and grants were given to expand the fleet.
The argument has been well made in the debate that, even without a CFP, there would be problems in our fisheries management. The UK fleet has problems now, such as black fish, which has a devastating impact on fish stocks and prices.
It is not fair to consider the role of other member states negatively. In recent discussions about the western controls, the Spanish presidency helped us to reach a workable compromise that was acceptable to the fishing industry.
The principle of relative stability protects the interests of our country, and has protected the interests of our country in such things as preventing access to the North sea by the Spanish. It does not necessarily follow that an extension of the European Union would mean that other member states' fishing vessels would have access to our fishing stocks.
I acknowledge the frustration of many sections of the fishing industry. I have visited many fishing ports and spoken to fishermen. I understand how they feel; I understand the fear for their jobs and their future. I understand their worries, with an aging fishing fleet and little chance of a scrap-and-build policy while we are so far adrift from our multi-annual guidance programme targets. In that respect, it is not fair to blame the current problems of the fishing industry entirely on the CFP. The Conservative Government must take some responsibility.
For years, the Government refused to introduce an effective decommissioning scheme although European Union funds were available. Part of the problem that we have now, with the lack of modernisation, stems from that. I question whether, on occasions, our Government took a tough stand in representing the interests of our fishing industry, because of the number of other conflicting interests that were of concern to the Government.
I return to the involvement and responsibility of the country's fishing industry. The industry has been constructive and helpful in suggesting good ideas for fisheries management and fisheries conservation. Some of those ideas should be taken more seriously—such as a ban on twin prawn trawls and the introduction of square mesh panels. There are ways in which that might be done in the CFP, as I shall explain later.
We cannot ignore the fact that our fleet has undertaken illegal activities. There has been increased pressure as a result of increased catching ability, more powerful vessels and increased use of technology. We cannot ignore those issues. We cannot ignore the fact that gear conflict, which sometimes occurs between our vessels and French and Spanish vessels, goes on regularly along our south coast among our own vessels, between the mobile fleet and the static fleet. Co-operation is therefore needed within the industry, and we need a united fishing industry.
The campaign for a 200-mile limit and withdrawal from the CFP has proved extremely divisive in the fishing industry. That is not helpful.

Mr. Gill: Will the hon. Gentleman give way?

Mr. Morley: If the hon. Gentleman will excuse me, I have little time. I do not want to take time from the Minister, who wishes to respond to the debate.
I want to mention a few aspects of the way in which members of the Labour party regard the CFP and ways in which we believe that it can be reformed and made more workable in the present structure.
My hon. Friend the Member for Great Grimsby (Mr. Mitchell) recognised and analysed succinctly some of the problems in the CFP and the way in which it has affected the industry. The hon. Members for St. Ives (Mr. Harris) and for Orkney and Shetland (Mr. Wallace) made some good arguments about the need to take a practical approach to the CFP.
It is important to tackle certain things, such as industrial fishing, which is primarily pursued by the Danes. We cannot tackle the problem of industrial fishing, which I believe should be prevented in the North sea, unless we do so by negotiation through an organisation such as that surrounding the CFP. There is no other way of doing it.
The CFP has certain advantages in ensuring proper management of our fish stocks. We need to protect our six and 12-mile limits and it would be desirable to negotiate, if possible, a small extension to give greater protection to local fleets on a regional basis.
The key to CFP reform is for member states to have greater autonomy in applying their own management. There is no reason why that cannot be done in the CFP. It would be interesting to hear the Minister's opinion on that. As long as it is applied on the basis of non-discrimination, there is no reason why we, as a member state, should not argue for such things as compulsory square mesh panels and certain closed areas at times of spawning in our own waters, which would apply to all vessels fishing in UK waters. We can have that autonomy in the structure of the CFP on a non-discriminatory basis.
We should review the way in which the quota management system works because of the problem of discards, but that problem is not unique to the CFP quota management system. There is a serious problem with discards in, for example, the northern mixed fishery method, which we need to tackle.
We cannot argue that we in this country have an absolutely clean record on fisheries enforcement. There have been problems in the United Kingdom which we need to tackle. With good will and with some commitment from the Government, we can enjoy the advantages of national control within a European and international fisheries management scheme, based on a reformed CFP. The overriding priority for the future of our fishing fleet and the environment of our seas must be a sustainable and properly managed fishing industry. That aim can be achieved within the present structure and we should not argue for an untenable position.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Tony Baldry): It is customary in such Adjournment debates for the Minister to come to the Dispatch Box and congratulate the hon. Member involved on succeeding in obtaining the debate. I do so today and, moreover, I am genuinely grateful to my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) for initiating today's debate as it provides me with a welcome opportunity to place on record my approach to the CFP. It also provides a welcome opportunity to clear up, once and for all, a number of misconceptions about the CFP that appear to have arisen recently. I also welcome the support on the Front Bench of my hon. Friend the Member for Aberdeen, South (Mr. Robertson), who is the Scottish Fisheries Minister.
As the United Kingdom's Fisheries Minister, I have only one purpose and aim: to represent and promote the best interests of the UK fishing industry and of UK fishermen. I hold no brief for the European Union and I certainly hold no brief for the European Commission or the European Parliament. My concerns are solely for the well-being of the UK fishing industry.
Since moving to the job in July, I have spent much time visiting fishing ports up and down the country and I have had the opportunity to listen at first hand to the concerns of the industry, both locally and nationally. There is no doubt that the fishing industry feels itself to be vulnerable, threatened and under pressure, and finds it difficult to see where its future lies. But the threat to the UK fishing industry does not come from foreigners; the real threat to it, as to fishing industries throughout the world, comes from dwindling and depleted stocks of fish around our shores, as was made clear in the excellent speech of my hon. Friend the Member for St. Ives (Mr. Harris). The biggest recent blow to the UK's fishing fleet came not when we joined the Common Market but when, in the 1970s, we lost access to the distant waters and fishing off Iceland and elsewhere.
I want the UK fishing industry to be stable and sustainable so that those involved in it have the confidence to make investment decisions for the future. I want an industry that has a clear purpose and direction as we approach and enter the 21st century. I am sure that the industry recognises, as do most sensible commentators, that to have a sustainable fishing industry it is necessary to match fishing effort—the effort taken to catch fish—more closely with the fish available in our seas. That requirement will result in a slimmer fleet, but I hope that it will be a more sustainable fleet that is able to invest for the future.
Some people suggest that any problems caused to the fishing industry occurred as a result of our membership of the European Union—particularly, our participation in the common fisheries policy—and that it would be in the best interests of the UK fishing industry for Britain unilaterally to seek to exit from the CFP. There are undoubtedly concerns about the workings of the existing CFP, which is why Ministers have set up a CFP review group with a view to examining in detail the present workings of the CFP and recommending how it can be improved to benefit our industry. That group has been working hard during the year and has received many submissions. It is drafting a report and I hope that it will be in a position to publish its report and its findings early next year.
The UK has been a member of the European Union for nearly a quarter of a century. It is clear from reading the debates of the time that, when in 1971 the House debated the possibility of Britain's membership, hon. Members were perfectly well aware that if the UK joined the Common Market it would join not only a common agricultural policy but a common fisheries policy. That fact was made perfectly clear in the debates at the time and in article 38 of the treaty. In the event, the House decided, by a majority of 112 votes, that Britain should join the European Community.
In 1974, an incoming Labour Government—for the internal political necessity of the Labour party—promised to renegotiate our terms of entry and to have a subsequent referendum. During those renegotiations, not a word was mentioned about fishing policy. A referendum was held, during which time those concerned about the impact of our membership on UK fisheries undoubtedly put forward their views. But the country decided, by a clear and convincing majority, that it wanted to say yes to Europe.
For Britain to exit from the common fisheries policy would require the unanimous agreement of all our Community colleagues to the necessary treaty changes—and they would have to be complex changes. Simply disapplying the fisheries provisions of the treaty would not be sufficient to exclude the UK fishing industry from the impact of general provisions of the treaty such as the requirements of non-discrimination and free movement—the sort of requirements that caught us in the Factortame judgment. The complex range of changes that would be necessary would all require unanimous agreement.
We obtained a pretty good deal when quota shares and restrictions on access to areas such as the Shetland box and coastal waters were decided. It is politically unrealistic to imagine that a new deal can be done that will result in other countries in the European Union giving away fishing opportunities to the United Kingdom. It is disingenuous for any of us seriously to suggest that this or any other United Kingdom Government would unilaterally seek to exit from a key policy of the European Union.
Even if we sought and secured such agreement, what would have been achieved? I or any future Fisheries Minister would have to spend almost an entire Parliament negotiating new arrangements with the European Union to meet not just our needs but the historic interests of our neighbours such as Ireland, France, Belgium and the Netherlands on subjects such as access and enforcement. We would still have to agree internationally to total allowable catches for fish stocks that straddle the areas within different fishery limits and we would still have to have a system of matching UK effort to available stocks.
In my attempts to be the best advocate for the fishing industry I have a duty to listen carefully to what the industry has to say. Like any good advocate, I also have a duty to tell the industry the facts as I see them. Suggestions that we could unilaterally abandon the CFP are not within the politics of the possible; they are a distraction.

Sir Richard Body: Will my hon. Friend give way?

Mr. Baldry: I am sorry, but I do not have time to give way.
Moreover, such suggestions do not tackle the key problems facing the industry—balancing the need to

maximise today's catch and the need to ensure sustainable levels of fish stocks to guarantee healthy catches next year and in subsequent years. We have to face up to not fear of foreigners but the straightforward fact that far too many fish stocks around the United Kingdom are seriously depleted or at a critical level. Of the main stocks in the waters that we fish, just over 40 per cent. are considered secure; the remainder are at risk of biological collapse, which means that they could not be fished economically—which is what happened to the cod of Canada. Nearer to home, that is what happened in the 1970s to herring and mackerel in the North sea.
It is important to pause to reflect carefully on why fish stocks are under such pressure. It is always tempting to try to blame someone, but the reality is more complex. If we do not make the effort to understand the reality, we will make an oversimplified diagnosis and seek the wrong solutions.
It is important to understand the role of fisheries science. It is a biological fact that the success rate of each year's spawning can vary massively. A mature female cod may yield 10 million eggs—their survival rate is tiny, as many are preyed on by other or the same species before they mature. Many factors influence the survival rate, including salinity, sea temperature and weather. As a result, in some years the survival rate can be much higher than the average. The peak years, when the so-called recruitment is good, constitute one reason why the scientists may advise that catches can be increased even against a background of poor stocks. That is why, against a general trend, the scientific advice is that we could catch more North sea cod next year. There has been one year of exceptional recruitment in that stock.
A salutary example of fishery science is provided by the Canadian experience. It is now generally accepted that one of the mistakes made in cod fisheries management was in placing too much reliance on the evidence of successful commercial fishermen. The scientific evidence showed that catching rates of research vessels were declining, but at the same time commercial catching rates were sustained at a reasonable level. Fishing was allowed to continue at too high a level and, ultimately, the stocks collapsed and the fishery was closed. With the benefit of hindsight, the commercial fishermen seem to have been successful because they were tracking down the limited numbers of remaining stocks.
The lesson is that fisheries management is difficult and is not an exact science. There is no answer that we can be sure is correct at any one time, but if we want to avoid disasters we must be ready to implement sensible and balanced precautions that may sometimes mean that fishermen are able to say after the event that we were too cautious. It is certainly misleading to pretend that the problems have nothing to do with our fishermen's activities, or that they are the fault of the Spanish when they have no access to fish stocks in the North sea or the Irish sea.
In the short time available to me, I hope that I have explained why I believe that it is disingenuous to suggest that departure from the CFP is the solution to all our problems. In subsequent debates between now and Christmas, I hope to respond to the House on the other points that were raised today—not least on how I believe that we may reform the CFP in the best interests of the United Kingdom fishing industry.

Water Supply (West Yorkshire)

11 am

Mrs. Alice Mahon: There is a great deal of interest in this subject—as we can see from the number of hon. Members who are present in the Chamber for the debate. I know that my hon. Friends the Members for Normanton (Mr. O'Brien) and for Barnsley, Central (Mr. Illsley) wished to be present for the debate, but they are meeting the Secretary of State for the Environment on another issue.
I requested a debate on the crisis facing the people of West Yorkshire months ago when the privatised Yorkshire Water company first proposed standpipes and later sought Government approval to implement 24-hour rota cuts. I can tell the House about the level of anger in Halifax and in other affected areas about the actions of Yorkshire Water. The public anger is unprecedented: I have not seen the like of it since the introduction of the poll tax.
People detest the way in which Yorkshire Water has conducted its business and the way in which it has blamed its customers for the current crisis. Customers are lectured time and again, as if the present situation has nothing to do with the company. This week the Government have been asked to give Yorkshire Water the authority to impose rota cuts and I ask the Minister not to give that permission. In my speech, I shall outline the implications for both my constituents and the local economy if permission were granted and the cuts went ahead.
My position on the issue of rota cuts is absolutely clear, and I believe that is shared by hon. Members on both sides of the House. I believe that the consequences of the 24-hour rota cuts would be so severe as to make the idea completely unacceptable. Whatever it takes and whatever it costs, the water must continue to come out of customers' taps. I think that the Government have a clear duty to ensure that that occurs.
I shall now turn to the record of Yorkshire Water since privatisation, as its abysmal mismanagement of that vital industry has led to the current crisis. We have lived through an exceptional drought; no one denies that. However, last winter was one of the wettest on record and in early spring our reservoirs were full.

Mr. David Hinchliffe: Does my hon. Friend agree that one of the most obvious causes of concern in Yorkshire is the ludicrous mismanagement of the industry by Yorkshire Water? Throughout the summer, in Calderdale and in nearby Kirklees Yorkshire Water threatened complete cut-offs, while in the immediately adjacent areas of Wakefield and Leeds people were allowed to use hosepipes until a month ago. Does my hon. Friend accept that Yorkshire Water's biggest failure is that it has not yet established the most basic, commonsense elements of the grid system? Will she press the Minister on that issue to ensure that the Government introduce a grid system, as that is surely the answer to Yorkshire's present problems?

Mrs. Mahon: My hon. Friend's comments have exposed the inadequacy of Yorkshire Water's management of the industry. I fully support his comments and I hope that the Minister will take them on board.
Upon privatisation, the water industry benefited from a debt write-off of £5 billion, a green dowry of £1.5 billion and a share underpricing of £873 million—in fact, there was the usual privatisation fix to assist the Government's friends in the City. Since privatisation, the bills to customers have increased by more than twice the rate of inflation. The people having to meet those exorbitant increases have paid for improved standards of quality that were imposed by the European Union and not by the shareholders or by the bosses of Yorkshire Water, who have simply filled their pockets. In June this year Yorkshire Water announced record profits of £161 million. Only £11 million was set aside for the repair of leaks, while the company chairman, Sir Gordon Jones, gave himself a 169 per cent. increase on his salary of £190,000.
Yorkshire Water also borrowed £50 million. However, it spent the money not on its core industry, but on speculative business ventures in China and in Europe. If some of that money had been spent on leaks and on maintenance, we might not be facing the current crisis. Months ago my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) produced the figures to show that Yorkshire Water is top of the national league for wasting water supplies. Some 103 million gallons—or one third of the total supply—is lost every day through leakage. That is an absolutely disgraceful record.

Mr. Barry Sheerman: I agree with everything that my hon. Friend has said—especially as I suffer the double whammy of living in Halifax while representing Huddersfield. Do not the Government also have a responsibility for the current situation? They knew that there had been a hosepipe ban in Yorkshire for five out of seven years and that if there was a drought, there would be trouble. Where was the Government's strategic long-term view? Throughout the summer Ministers simply ran around like headless chickens trying to make it appear as though they were doing something constructive.

Mrs. Mahon: My hon. Friend makes his point very well. Since privatisation in 1992, Yorkshire Water's investment in repair and maintenance has fallen by £44.8 million-26 per cent—while demand has increased. As my hon. Friend said, that information was available to the Government but they failed to act upon it.
I have also discovered that the company does not employ people from the Halifax area to repair bursts or to make new connections: there is no direct labour force. The work is "outsourced"—that is privatisation-speak—or contracted out to small contractors such as O'Donnells of Bradford on a strictly cash-limited budget. Prior to the crisis, all repair work on leaks was stopped unless a major burst occurred. In my village of Northowram, water was allowed to cascade down a steep hill for months and repairs were not made until the conditions became so dangerous that one could almost skate on the resulting ice. I understand that Kirklees and Bradford also operate with no direct work force.
Yorkshire Water has a leakage detection team that marks were leaks occur so that private firms can repair them. But sometimes repair work is not undertaken for weeks or months—if at all. Those private firms are not accountable to anyone, as Yorkshire Water is more interested in making money than in repairing leaks. I have also been informed that it had planned to implement a scheme called Operation 2000 in October, which would


have abolished the leakage detection teams altogether. However, because of the present outcry, its abolition has been put back to January 1996. Will the Minister inform us about that proposed abolition?
Night-time waste detection teams were disbanded two years ago and Yorkshire Water now accepts that 25 per cent. is an acceptable level of leakage. Headwork teams, comprising men who dig conduits to channel water into the reservoirs and keep the silt out, have been steadily disbanded. Water is allowed to form bogs and small lakes around the reservoirs instead of being channelled into them. Silt continues to filter into the reservoirs. I have visited the reservoirs with experts, and in some areas we have seen silt up to 100 ft deep. Had that silt been cleaned out, there would have been greater capacity and, therefore, more water.
Since privatisation, the reservoir keeper has become responsible for more reservoirs, but he does not have the same number of workers as before. Two years ago, Yorkshire Water seriously considered replacing its dwindling band of skilled water workers with Securicor. Can Members imagine anything more ludicrous? That is the level of neglect that privatised industry has imposed on a vital, life-giving resource.
When the current crisis is over, Yorkshire Water's greedy and incompetent managers should be exposed to detailed public scrutiny. Never again should they be allowed to bring the health and well-being of the people and the economy of West Yorkshire to the brink of disaster. We all know that they ptit profit before service and that will not do. They are not fit to be in charge and those responsible must go.
I turn now to the people who will be affected by 24-hour cuts. Since the beginning of the crisis I have received many representations from the public, industry, local businesses, schools, national health service professionals, nursing homes, council offices, the fire service, charities, local pensioner groups and many others.
Mid Yorkshire chamber of commerce said last week in its objection to the tribunal considering the application for the emergency drought order:
The major effect that rota cuts will have is the considerable disruption to production flow. All firms have contracts which must be met and loss of production for 24 hour periods will severely hinder a firm's ability to meet deadlines.".
It also wrote to me saying:
At no time during the development of the drought did Yorkshire Water contact the Chamber. It was the Chamber which contacted Yorkshire Water at the beginning of September to ask for hard information and offered to assist in bringing about awareness through its membership of around 2,500 firms from industry and business.
It had to take the initiative.
The West Yorkshire fire service objected to the drought order through the local evening paper, the Halifax Evening Courier, which, along with other media, including the Yorkshire Post and Radio Leeds, has sustained an excellent campaign throughout the crisis and kept the public informed. The local authority's chief fire officer said:
Fire fighting in Calderdale would be seriously compromised if rota cuts go ahead.
Mr. Jim Manuel, West Yorkshire's most senior fire officer, told the drought hearing:
'A fire in a large multi-storey building, we would be incapable of controlling under those circumstances.'

Yorkshire Water had said they could turn the mains back on within one or two hours, said Mr. Manuel. 'I think that would be largely academic'.
That is an example of Yorkshire Water's response. Old mill buildings, which are common in West Yorkshire, could present a serious hazard.
Holdsworth and Company is a local textiles firm that has tried its best to conserve water. I took my hon. Friend the Member for Holborn and St. Pancras to visit that reputable local firm. Holdsworth and Company warned that if it had to close and fell behind with production, vital exports could be lost and once lost could be gone for ever.
The Confederation of British Wool Textiles said that if water cuts became fully operational, there might be lay-offs of up to 3,000 people in Calderdale and Kirklees.
The Royal Society for the Protection of Birds wrote me a very witty letter saying that if the crisis were not so serious, it
could have been taken from a Gilbert and Sullivan comic opera.
We have the tankers commandeered from chocolate makers and chemical companies to fill up in Northumbrian reservoirs.
More seriously, it said:
We have the rivers Wharfe and Ouse being drained—placing fish, birds and other wildlife in jeopardy. This is a prime example of the environment paying the price for poor management of water resources.
I could not agree more.
Guy Cocker of the local dental services committee told the inquiry:
Dentists operate on living tissue and as any surgeon have to scrub wash their hands between each patient. It would be difficult to see how this could be done if water is not of the highest quality and free of bacterial infestation. It may well be that General Dentist Practitioners have to close their surgeries.
Calderdale Nursing Homes Association felt the same as nursing homes were not exempt, as hospitals and police stations were. It said:
We care for most vulnerable and frail members of society. Many are very ill, doubly incontinent and unable to resist infection. Lives will be at risk without an adequate water supply.
Recognising the severity of the crisis, I wrote to the Prime Minister on 17 August asking Parliament to intervene and for the Government to recall Parliament. I received only a holding letter. I wrote again on 18 September and on 22 September drawing attention to lead articles in the Evening Courier and the Yorkshire Post. I sent the Prime Minister all the information. I also wrote to the Secretary of State for Health and the Secretary of State for the Environment.
I finally received a reply from the Prime Minister on 26 September. What a disappointment it was after waiting almost six weeks. He said:
The five months April to August were the driest five months for over 200 years. It is unrealistic for water companies to plan, invest and increase charges to customers to cater for all demands through such a rare event.
I do not agree. Water companies have responsibilities.

Mr. Gerry Sutcliffe: Was not that disappointing response from the Prime Minister compounded by the response from the Secretary of State for the Environment in the summer, when he told people to stop whingeing and enjoy the weather? He did not care about the people of West Yorkshire.

Mrs. Mahon: That was the usual insult from the Secretary of State for the Environment instead of a helpful suggestion. The Prime Minister's letter continued:
I understand that although reservoirs which supply Bradford and Halifax areas were at full capacity at the beginning of the summer season, they did not have the usual topping-up from run-off due to the exceptionally dry weather since April.
Overall the privatisation of the water industry has been an outstanding success.".
It did not matter to him what my constituents felt.
Last winter was one of the wettest on record. I would have found the Prime Minister's comments about the exceptionally dry weather farcical were we not facing such a serious crisis. What does he think happens in Australia, Saudi Arabia and Kuwait? People plan ahead.
Last week, the right hon. Gentleman compounded farce with insult when he replied to my intervention during the debate on the Queen's Speech by saying:
In addition to everything else, the Opposition have a policy to make it rain when it is convenient."—[Official Report, 15 November 1995; Vol. 267, c. 27.]

Mr. John Gunnell: Does my hon. Friend agree that Yorkshire Water's planning has consisted of closing reservoirs and seeking planning permission to build on those sites?

Mrs. Mahon: That is well documented and well known to people in West Yorkshire.
The Minister for Local Government, Housing and Urban Regeneration insisted that the Government could not intervene, yet they do in other matters. In response to a request from my hon. Friend the Member for Huddersfield (Mr. Sheerman) for the Army to be brought in, he said that help in distributing water by the military was impossible because the Army water tankers were busy in Bosnia. He was not concerned about the people of West Yorkshire.
The tankers have come to the rescue, but do Members have any idea of the disruption to the lives of people living round the Albert reservoir in Halifax? I took my hon. Friend the Member for Holborn and St. Pancras to see it. Yorkshire Water is paying compensation to people who live nearby.

Mrs. Helen Jackson: Is it not the case that the whole tankering operation is moving 13.5 million gallons a day while 100 million gallons a day are leaking away? Could not the whole crisis have been avoided?

Mrs. Mahon: Such a test could have been set in a primary school. There are 250 tankers a day operating in Calderdale, and that figure will increase to 600 as other parts of West Yorkshire are hit by the drought. The constant noise and pollution caused by those lorries as they drive past every day are seriously disrupting people's lives.
I pay tribute to the three local councils involved and particularly to Calderdale's leader, Councillor Pam Warhurst, Councillor Paul Wyatt, who lives in the area where the tankering is in operation, chief executive Michael Ellison and Mr. Paul Steed, principal planning officer, who have all planned for the crisis. While the Prime Minister and Whitehall completely ignored the growing crisis, others were trying to do something. I wonder whether the Prime Minister would have ignored

me for six weeks if the affected area had been Huntingdon or the home counties. In no way is the north-south divide better illustrated.
The council has already delivered 1 million litres of bottled water to schools and nursing homes, at the cost of a great deal of time and money. I hope that it will be fully recompensed. When the inquiry opened last week in Dewsbury, Yorkshire Water announced a £2 million compensation package for customers who might be hit by the cut-offs—£2 per week for each property and £15 every fortnight for the inconvenience. There will be nothing for industry, and that is not good enough. One cannot put a price on people's health or jobs.
Why did not Yorkshire Water have a long-term strategy or listen to Diana Scott, who was doing such a superb job of warning of all the folly and neglect? She was doing her job properly, but got sacked for it. Where has Ian Byatt been until recently? Why is that man paid all the money that he is? The Government have washed their hands of 600,000 people in West Yorkshire.
Yorkshire Water's long-term strategy has been to pray for rain. The way that it has insulted customers is diabolical. It makes a mockery of the term privatised business when Yorkshire Water has spent months exhorting customers not to use its product.
The tankering operation is costing £3 million a week. Imagine if that money had been spent earlier on repairs and a decent strategy. Why do the Government think that the crisis is not of their doing, when they are the guilty men and women who handed over a precious asset to a private company? The Minister said that Army tankers are not available, but that is not good enough. Pipelines can be installed in days when there is a war—we saw the most amazing logistics and operations during the Falklands and Gulf wars. Why is it thought that the people of West Yorkshire are less important than the people of Kuwait or of the Falkland Islands? Yorkshire Water did no planning until it looked into the abyss and saw the future—and only then because the company realised that cut-offs could cause it to go bankrupt.
I call on the Government to take over Yorkshire Water and to promise that customers will not have to pay for the company's folly. I ask the Government to put every resource necessary into ensuring that the people of Calderdale and Kirklees will not have their water cut off and to refuse any request to do that. There must be a full and frank public inquiry into why almost 600,000 people have had to experience threats and intimidation from a company in a first-world country, and who may now have to face the kind of hardships that confront people in third-world countries. It is time for Yorkshire Water to go and for the Government to take on the company's responsibilities.

Mr. Graham Riddick: It is important to debate this subject this morning. I also submitted an application for an Adjournment debate this week, and I congratulate the hon. Member for Halifax (Mrs. Mahon) on her success in the ballot. In recent months, this issue has not been wholly party political, which is a good thing. All Members of Parliament for Yorkshire have united in urging Yorkshire Water to take whatever steps are necessary, which is a positive aspect of the affair.
I regret that the hon. Lady has made the issue party political with her speech this morning. The crisis would be taking place whether the water industry was in the private or the public sector. I have press cuttings from 1976, when Labour was in government, reporting on standpipes going up in Holmfirth. People in my constituency were being threatened with cut-offs at that time.
It is only fair to acknowledge the significant shortage of rain in recent months. I am not for a moment apologising for Yorkshire Water, and I will say some rough things about it in a moment. I was interested to note that one of the 1976 press cuttings reported that water charges might increase by 25 per cent. the following year to pay for combating the crisis. Now that the industry is in the private sector, I expect to see the company's shareholders—not its customers—pay for the measures that Yorkshire Water has had to take.
If Yorkshire Water had been in the public sector, I have no doubt that Labour would be saying that the crisis was all the Government's fault because they had not invested sufficiently in the water infrastructure. If Labour had been in government, Conservative Members would probably have said exactly the same. As the industry is in the private sector, we can stand back and be rather more objective than might otherwise have been the case.

Mr. Terry Rooney: It may surprise the hon. Gentleman to learn that, in 1976, I would have been one of his constituents, so I know what he is talking about. Is the hon. Gentleman aware that in 1976, Yorkshire Water—free of any payment or levy—was able to take water from the North West, Northumberland and Severn Trent utilities? Today, the company must buy that water. That is the difference.

Mr. Riddick: Yorkshire Water is taking as much water as it can from Northumberland and the north-east now, so nothing has changed.
We can all agree that Yorkshire Water's customers among our constituents should be asked to save water. Despite the company's statement on Monday that there will be no need to introduce rota cuts before the new year, we are not yet out of the woods. It is important that the public continue to save water wherever they can. I know that my constituents are doing that, and I am sure that people throughout West Yorkshire are doing so. That should continue.
I believe, like the hon. Member for Halifax, that it is wholly intolerable in this day and age that my constituents should be faced with the possibility of having their water supply cut off 24 hours at a time. That is an appalling prospect for domestic householders and it would create extreme difficulties for pensioners, who rely in most cases on central heating to keep warm, and for parents of young families. It would also be disastrous for industry.
The textile industry became established in West Yorkshire mainly because of the ready and plentiful supply of water. The Confederation of British Wool Textiles estimates that 3,000 workers in the industry would have to be laid off if rota cuts became fully operational throughout Kirklees and Calderdale. There are a total of 50,000 jobs in Kirklees in manufacturing, textiles, engineering, chemicals and food production—all of which are major water users. If rota cuts were introduced, thousands of local people would be laid off,

which would be wholly unacceptable, and many small companies would go out of business. Water cut-offs would be a real shocker for the local economy, and they must not be allowed to occur. Their effects on the ability of fire fighters to do their job would be disastrous, and hospitals, dentists, old people's homes and schools would also be seriously affected.
The hon. Member for Halifax was not the only person to express her concern early on. In August, before the problem became really serious and only four months into the drought, I said that this year's problem showed a lack of sufficient storage capacity. In his chairman's statement of 1990, the chairman of Yorkshire Water plc said:
During the year we faced another challenge as Yorkshire experienced one of its worst droughts this century.
In the Huddersfield Daily Examiner of September 1994, Yorkshire Water's general manager in charge of water supply was quoted as saying:
In the exceptional circumstances of a very dry summer and an unprecedented high demand we had no option except to take the steps we did",
which were applying for drought orders.
Clearly there is a continuing problem. The fact that we have had hosepipe bans in five of the past seven years is confirmation of that. West Yorkshire has insufficient storage capacity for water. Yorkshire Water has complained about increasing demand on the part of customers. Most companies welcome increased demand from their customers, and Yorkshire Water should have been prepared for it. As industry emerged from the recession, it was only natural to expect companies to use more water. As householders' living standards rose, so consumption of water was also likely to increase. People buy dishwashers, which use a lot of water; they buy second-hand cars, which they want to wash. People also want to water their gardens, especially in hot, dry summers. Yorkshire Water should be in a position to respond to customers' increased demands.
I have no doubt that the company is fully aware of the seriousness of the situation and recognises that rota cuts would be wholly intolerable. I am also convinced that the Minister is fully aware of how serious matters are. I was delighted that he came up to West Yorkshire last week—I was pleased to see him even if the hon. Lady was not. We had a useful meeting in Brighouse, and he was able to see for himself the tankering operation at Scammonden. Judging by his comments, privately to us and also in public, he is clearly aware of the serious nature of the problems.
I would urge the Minister not to grant the drought order to Yorkshire Water. If he does not, the company will have to take whatever steps are necessary to maintain the water supply. At this point I will read an extract from a letter I have received from one of my constituents, who takes a hard line on this matter with which I fully agree. He is a solicitor working in Huddersfield and he writes as follows:
If privatisation means anything it means that the supplier of the utility concerned must pay for its acts and defaults. If the order is not made and Yorkshire Water is unable to supply the people of Kirklees and Calderdale, the people of Kirklees and Calderdale will sue Yorkshire Water, which will be liable in damages. If by reason of that Yorkshire Water becomes insolvent, so be it. Yorkshire Water will be placed in liquidation, its assets sold to another undertaking and the proceeds of the sale will be available to satisfy the claims for damages from the citizens of Kirklees and Calderdale.


I agree with my constituent, but I do not agree with the hon. Member for Halifax, who wants to allow civil servants to handle the crisis—that is not the answer. It seemed to be her solution, for she called on the Government to take over Yorkshire Water.
Back in August, I raised the issue of bringing in supplies of water from the Kielder reservoir. There is some confusion about this, but I believe there is scope to increase the supply from that source, and Yorkshire Water will need to examine that option both for the immediate future and for the longer term.
Another point about 24-hour rota cuts is that, in practice, many people will fill up their baths and basins with water in advance, and may thereby use more water than they would have without the cuts.

Mrs. Helen Jackson: Does the hon. Gentleman agree that if there had been a connecting grid between the Kielder reservoir and the Yorkshire and Humberside area, this crisis would not have occurred?

Mr. Riddick: Yes. I have talked to Yorkshire Water about that. The fact is that the company can get water from the Kielder reservoir into the Tyne and the Tees; it needs to build a pipe about 10 miles long from the Tees to the Swale, and thence to the Ouse so as to pipe it through to Leeds. Currently 90,000 tonnes of water are being transferred from the Ouse to the Leeds grid. A senior manager of Yorkshire Water told me yesterday that the company is looking for massive pumps to increase the rate of flow from the Ouse.
Once the immediate crisis has been overcome, Yorkshire Water must invest in a grid to ensure that water can be transferred between various parts of the county, and bring in water from outside the county when necessary. Water storage capacity needs to be increased to meet the demands of an increasingly prosperous society. That can probably be done by a combination of increasing yield from ground waters and industrial rivers, and possibly from new reservoirs and outside sources such as Kielder. Leaks should also be reduced in the short term, and Yorkshire Water must do whatever is necessary to maintain supplies.
The Government must not, however, grant the drought order because rota cuts would be wholly unacceptable in this day and age.

Mr. Terry Rooney: I found some of the comments that we have just heard amazing. I wonder where the hon. Member for Colne Valley (Mr. Riddick) has been throughout this episode.
In the first week of August we in Bradford were told that, unless there was significant rainfall by the end of August, we would have standpipes. That idea fell by the wayside, though not because of rain. At the beginning of September we were told that, instead of standpipes, we were to have alternate 24-hour rota cuts. That resulted in an application for a drought order to the Secretary of State for the Environment, and a public inquiry was set up. For some reason, the application was withdrawn at the last minute and the public inquiry was cancelled. In the meantime, we have not had much rain.
Another difficulty lies with the statistics supplied by Yorkshire Water. If we calculate average daily use, the amount of water brought in by tanker and the amount of rainfall that we have had, the sums do not add up. I suspect that, all along, supplies in West Yorkshire have been between 10 and 15 per cent. higher than Yorkshire Water has admitted; otherwise Calderdale would have run out of water five weeks ago.
It seems that Yorkshire Water has no conception of what rota cuts would do to the economy. Their effects on householders and schools are obvious. Of the top 50 overseas-earnings companies in Yorkshire and Humberside, 13 are in Bradford, representing £1 billion of exports and 20,000 jobs. These companies are being told to shut down every other day. Let us consider companies operating in the food chain. They are being told to boil the water that they use on alternate days. Sunblest bakery is located in my constituency; it uses 500,000 gallons a day, making an awful lot of bread. The director asked me how he was supposed to boil that much water before using it. That bakery will be short until the rota cuts have finished. If they continue, every school kitchen will have to close, and every supermarket and small business will be at risk. Yorkshire Water has no conception of what has been going on.

Mr. Sutcliffe: Yorkshire Water wrote to the affected companies asking why they did not relocate during the crisis.

Mr. Rooney: That would be all very well if they could relocate in the Amazon rain forest.
Yorkshire Water has claimed that the problem lies with consumption and supply, but in fact it is a problem of distribution. Throughout the summer months—even according to Yorkshire Water's polluted figures—supply in the area did not fall below 45 per cent. The whole system is geared to a water supply in the Pennine areas, and pumping stations to pump it into the east; there is no facility for pumping it back. As a result, the east of the county was flooded with water while there was a shortage in the west.
In the first week of September, when Bradford was faced with the prospect of 24-hour cuts, Yorkshire Water was taking tankers to the racehorse trainers' gallops at Middleham and Malton—free of charge—and spraying water all over the place. The racehorses had to be protected, but the people of Bradford could have their water cut off every other day; that was fine. Meanwhile, hundreds of thousands of gallons were being delivered every day, free of charge. That is nonsensical.
Those who know the geography of the area will be aware that Bradford and Leeds are next to each other. In September, when the discussions were in progress, it was suggested that a pipe should be installed connecting the distribution system covering the area between Leeds and Sheffield with that of Bradford. The local authority offered manpower, and even offered to contribute to the cost, but Yorkshire Water would not entertain the idea, which would have obviated any need for rota cuts.
Since July, when Mr. Newton made his infamous claim not to have had a bath for three months—which turned out to be about as truthful as his supply statistics—Yorkshire Water appears to have been run by a public relations gentleman called Steve Painter. At the end of the day, Mr. Painter is a messenger boy, albeit a very good


one. Unfortunately, like most messenger boys, he does not understand the message that he is conveying. The public are fed to the back teeth with being told that it is all their fault; they are fed up with being treated like idiots. It is time that Yorkshire Water put those who are in charge of the system up front, rather than the public relations people. It is time that it gave the public confidence in the water supply.
Towards the end of September, when Bradford was still under the threat of 24-hour rota cuts, an appalling fact came to light. Yorkshire Water had signed up to 61 commercial deals with Bradford companies, involving supplying them with water from Selby: they would have to pay for transport, but not for the water. No nursing home or person with a home dialysis machine could have a water supply, but a commercial concern that was willing to pay could have one. That sums up the difference between 1976 and 1995.

Mrs. Elizabeth Peacock: I welcome the opportunity to speak about Yorkshire Water, and congratulate the hon. Member for Halifax (Mrs. Mahon) on obtaining the debate. I shall express my views on behalf of 77,500 constituents and their families; I also spoke on their behalf on Friday, when I attended a public inquiry.
It is a matter of public record that Yorkshire Water has spent millions of pounds on infrastructure. It has certainly spent a good deal in my constituency. Indeed, it has spent more than has been spent for centuries. Much more needs to be spent, however, particularly on leakage control. It is nonsensical that so much water is being lost every day when it is becoming such a precious commodity. I believe that every consumer in the Yorkshire Water area should benefit from water supplies at home and in hospitals, schools and businesses.
The situation is serious, and it should have been anticipated. We have not had the rain that we should have had. Certainly, neither my hon. Friend the Minister nor Yorkshire Water can make it rain—if they have tried, they have been using the wrong rain dance man—but Yorkshire Water should have started planning for the worst possible scenario early in the summer. If it had taken action at different stages, putting its plan into operation, we should not now be discussing the possibility of rota cuts.
Of course we must all save water: everyone has a responsibility to do that. I wonder, however, whether Yorkshire Water—or, perhaps, my hon. Friend the Minister—can tell me who owns the water that is in the full reservoirs at Whitley and Addingham, which I understand to be fairly full, and why it is not available in my part of Yorkshire.
It was not at all helpful of the managing director of Yorkshire Water to say on television that he had not had a bath for three months. When the media asked me to comment, I said that I would hate to sit next to him on a bus. We have spent years taking people out of houses that had no proper facilities such as running water, but now there is a possibility that we will allow Yorkshire Water to cut off the supply that we spent so much money and time installing. People in Batley and Spen want water—they are not too worried about compensation—and they want it delivered through their pipes rather than in bottles.
There is no shortage of water in the surrounding areas. It is absurd to say that there is a drought. It seems that everywhere in the country except our bit of Yorkshire has water; why cannot some of it be piped to us? What is Yorkshire Water doing about this?
Yorkshire Water has been running more than 200 tankers, and the number is to rise to 600. That is fine, but anyone driving up the M62 at any time of day or night will follow a constant stream of tankers. When they enter urban areas, people's lives become impossible: it is as if a rolling tank regiment were passing their doors continuously, day and night. Many people are being made ill; they and their children cannot sleep. Yorkshire Water must take the problem seriously. The tankers bring their own pollution, along with traffic congestion and noise.
Why can we not have a temporary pipeline? I am sick and tired of everyone telling me over the past few months what cannot be done; I want to hear what can be done. If our Army engineers were here, they might be able to install a temporary pipeline, but they are all in Bosnia. I believe that we in West Yorkshire are just as important as those who are suffering in Bosnia.
I am told that it would take between six and nine months to install a pipeline. Why? We sent our Army into disaster areas to lay pipes in difficult conditions and in a very short time. If all else fails, why do we not get Anneka Rice? She can do almost anything in 48 hours. Perhaps we should talk to her—or perhaps Yorkshire Water should do so.
We are told that we have part of a pipeline that goes from Kielder all the way down to Teesside, and I understand that there is a gap of about six and a half miles. If that gap were filled, the supply could be brought to Swaledale; once it arrived at Swaledale and the Ouse, we could all have water.

Mr. Jack Thompson: As the hon. Lady knows, my constituency is not in Yorkshire but in Northumberland. I was very much involved in the development of the Kielder reservoir when I was a member of the water authority. Given her political beliefs and her faith in the free market, does the hon. Lady recognise that my constituents who are shareholders in Northumbrian Water will benefit, receiving an increased dividend? Some good is coming from the exercise, in Northumberland if not in Yorkshire.

Mrs. Peacock: The hon. Gentleman is correct; if someone has a commodity and someone else wants it, it has to be bought, and that is what Yorkshire Water will have to do. If that benefits shareholders in the hon. Gentleman's area, good luck to them. Yorkshire Water shareholders might not benefit so much, because I believe that they should foot the bill for whatever it takes to supply water to my constituency.
We have householders, many of whom are elderly, and we have schools, nursing homes, hospitals and local businesses. I am sure that the Minister has heard a lot from local businesses recently. In my constituency, Fox's Biscuits employs 2,200 people, and it could not make biscuits or enforce hygiene in the factory without water.
Earlier this week Nigel Worne, Fox's Biscuits managing director, said:
We are the biggest private employer in Kirklees and Calderdale with 2,200 staff and the implications of having no water are enormous. Cutting it off for 24 hours at a time would be even worse because Yorkshire Water couldn't guarantee constant purity. We use 44,000 gallons of water a day.


Of course Fox's Biscuits uses that much water; its biscuits are sold internationally—indeed, all over the world—as well as in all the best stores in the United Kingdom. Furthermore, the company employs many people in my constituency, and I want that to continue.
I have had a great deal of contact with our textile companies, through the Confederation of British Wool Textiles. John Whitfield, of Thomas Carr Ltd., another large employer in my constituency, described the application for rota cuts as "a short-term, ill-considered decision" that would have "a long-term devastating effect" on local industry. Talking about three or four firms that provide another 1,000 jobs, he said:
Closure of our firms will have an immediate knock-on effect on employment on both our raw material suppliers and carpet-producing customers.
Thomas Carr Ltd. is another firm that sends 50 per cent. of its goods for export, and this is its busiest time of the year. If it does not complete its orders, it will lose not only those but future orders, because its customers will go elsewhere to buy.
As we have already heard, earlier in the summer Yorkshire Water suggested that some of the affected companies should relocate. What arrogant nonsense. What right has Yorkshire Water to tell companies in my constituency, or anywhere else in Yorkshire, to relocate? In my constituency alone there has been millions of pounds worth of investment over the past 10 years. It is downright arrogance to say, "Sorry, we can't let you have water. Would you mind gathering up your factory and taking it 10 miles up the road?" In fact, it is disgraceful.
I urge the Minister to ensure that, if necessary, the Government will lift planning restrictions so that a temporary pipeline can be laid. I have discussed the matter several times with my hon. Friend, and I know that he is sympathetic to what we are saying. If that is the way to get water into the area, so be it—and I understand that it is now being discussed.
May I also have the Minister's assurance that the recent public inquiry will not necessarily lead to rota cuts? Last week, the general view of the media in Yorkshire was that the inquiry was merely an exercise, that rota cuts were already on the cards and that the public inquiry was little more than a waste of time. Will my hon. Friend assure my constituents and me that that is not so, and that he will ensure that every possible source of water, however expensive it may be, is explored by Yorkshire Water, so that our householders, consumers and businesses can continue their activities over the next few weeks, when clearly things will be difficult?
I repeat that there is plenty of water around. Yorkshire Water must go out and buy it and get it into our areas, perhaps by using a pipeline.

Mr. Max Madden: Earlier this month, a constituent of mine wrote to my hon. Friend the Member for Halifax (Mrs. Mahon) saying:
I write, as a disillusioned Tory, to thank you most sincerely for forcing Parliament to debate the serious mismanagement of collection and distribution of water in the Yorkshire area … The

blame should be laid fairly and squarely on the present government. There never has been a better case for having a National Water Grid serving a Nationalised Water Board".
I ask the Minister for three undertakings. First, I would like a clear assurance that the Government will require Yorkshire Water to take every possible action to avoid the interruption of water supplies in any part of Yorkshire in the foreseeable future.
Secondly, will the hon. Gentleman assure me that the Government will not agree to any further drought order? I also ask for clarification as to whether the granting of a drought order automatically exempts Yorkshire Water from paying reasonable compensation. That is a grey area, and the Minister should clarify it this morning.
Finally, I ask for a clear undertaking that the Government will authorise a wholly independent inquiry soon, to examine several matters, especially Yorkshire Water's investment programme for repairing leaks.

Mrs. Helen Jackson: Does my hon. Friend agree that the present proposal that such an inquiry be sponsored by Yorkshire Water is totally unsatisfactory? Is it not true that any inquiry must be completely and utterly independent of that company if it is to have any credibility for the people of Yorkshire?

Mr. Madden: I thoroughly agree. That is an absolute requirement. Moreover, there would be no confidence in any inquiry initiated by the water regulator, who is widely regarded as someone who would find it difficult to regulate his way out of a wet paper bag.
Such an inquiry should be able to investigate the ability to move water around within the region and between regions. It should also examine the closure of reservoirs that has taken place in Bradford and other parts of West Yorkshire—primarily, it would appear, to raise even more money for the shareholders of Yorkshire Water.
The inquiry should also examine the handling of the summer crisis, which, as the Minister has heard from both sides of the House, left much to be desired. Finally, it should inquire into Yorkshire Water's diversification into all sorts of business activities other than supplying water, not only in this country but around the world.
The most recent edition of Private Eye reports:
Drought-stricken Yorkshire Water is using its newly-found customer relations skills to top up its profits. The company is holding a seminar for the PR industry on how to improve communication skills and handle the media. Appropriately the £35-a-head session ends with a lecture on 'crisis management'.
I cannot conceive of any organisation less fit to advise others on crisis management than Yorkshire Water.
I hope that in replying to this important debate, the prospect of which I suspect persuaded Yorkshire Water not to embark on rota cuts anywhere, the Minister will make it clear that he will not tolerate that company's interrupting water supplies anywhere else in Yorkshire. I also hope that he will respond to my request for undertakings.

Mr. Spencer Batiste: From what we heard earlier this week, it appears that because of recent rainfall, the immediate crisis has been postponed into the new year. However, no one knows what rain will come later this year, in the winter or even next summer, and the


debate gives us an important opportunity to establish clearly what our priorities should be for the water industry in the future.
First and foremost, it must be clearly stated that water supply must be guaranteed, at whatever cost to the shareholders of any water company. Water must come to homes, schools, hospitals and businesses. Proposals to restrict the supply are unacceptable.
This is not a national crisis, because there is no national shortage of water. It is a local issue; water does not happen to have fallen in the places where the water companies traditionally predict that it will. The problem is therefore one involving the supply system rather than general drought conditions. It has been caused by the lack of a national grid and the lack of action to deal with leakage. These are the consequences of a century of under-investment in the water industry, and privatisation has for the first time brought large-scale investment into that industry. The problem we face is that, until now, investment has been focused on other important priorities such as improving water quality, dealing with sewage and improving the quality of rivers. Money has not been invested in the basic issue of guaranteeing the supply of water to consumers.
Weather patterns are very variable, and they are becoming increasingly unpredictable. We cannot rely on rain falling in the Pennines over the summer in a way that will guarantee water supplies to the homes that depend upon it, and Leeds is every bit as much at risk as Bradford, Halifax or any other area. We must ensure that a system is in place that will ensure water supplies to all, whatever the local conditions may be. Tankers are not the solution, as they cause havoc on the roads. Increased extraction from rivers has an enormous knock-on effect on wildlife, and we should be carefully monitoring that effect already.
Frankly, the priorities which have been established for the water industry need to be reassessed. Obviously, we want to improve the quality of our drinking water and the purity of water in our rivers, but first and foremost we must be able to deliver water to homes, schools, businesses and hospitals.

Mrs. Helen Jackson: Will the hon. Gentleman give way?

Mr. Batiste: I have only a short time, and I am sure that other hon. Members would like to speak. The hon. Lady has already intervened on two or three occasions.
Clearly, we need a grid system which will shift water from areas which have it to others which do not. Kielder in Northumberland may have water this year, but it may not next year, and Northumberland may be asking Yorkshire for water next year. A system must be in place that is able to provide that water.
Leakages must be addressed, and the neglect of the infrastructure in this century must be addressed quickly. Above all, it seems to me that Yorkshire Water is responding to the crisis in a way that is still reflective of a nationalised industry. The company is looking at the crisis on the basis of trying to control demand when it should be managing supply a great deal better. I hope the message that comes from this debate today is that, for hon. Members on both sides of the House, the people must come first and the supply of water must be guaranteed.

Mr. Frank Dobson: I must start by congratulating my hon. Friend the Member for Halifax (Mrs. Mahon) on initiating this debate. More to the point, I should congratulate her on the campaign that she has waged against the shortcomings of Yorkshire Water and the way in which its incompetence continues to threaten the health and prosperity of people in Halifax, Calderdale, Bradford, Dewsbury, Huddersfield, Colne valley, Leeds and surrounding areas. Together with other Labour Members from Yorkshire, my hon. Friend has been relentless in speaking up for local people against the incompetence and profiteering of their privatised water company.
I should add my congratulations to those involved in newspapers, radio and television in Yorkshire, who have been stalwart campaigners on the matter. Despite the fact that they are run by a company that does not hide its light under a bushel—a company that is rightly described as Yorkshire Conservative newspapers—I should include in that my congratulations to the Yorkshire Post and the Yorkshire Evening Post on their campaigns.
No one who has followed this debate—or, more to the point, what has been happening this summer and autumn—could possibly doubt that Yorkshire Water is failing the people of Yorkshire. Equally, no one can doubt that Yorkshire Water is profiteering at the expense of its customers and the taxpayer. One needs only to look at the figures. Since Yorkshire Water was privatised in 1989–90, household bills have gone up by more than two thirds, or 68 per cent. Profits have more than doubled, and are up by 144 per cent. The pay and perks of company bosses have nearly quadrupled, and are up by 288 per cent. The market value of the company has more than doubled—it is up by 165 per cent. Nice work if you can get it.
The company and the Government claim that investment has increased. It did at the beginning, but it has tailed off. In any case, most of that investment was financed directly by the taxpayer. When the water industry was privatised, the Government handed over to the new private owners £6.5 billion of the taxpayer's money. Out of that bonanza at the taxpayer's expense, Yorkshire Water got £648 million. In the first five years of privatisation, Yorkshire Water invested £700 million in water supply. As I have explained, £648 million of that came from the taxpayer, leaving only £52 million—or 7 per cent.—to be met by the company from its £721 million profit.
Since privatisation, Yorkshire Water has paid no mainstream corporation tax at all. It has paid just £50 million in tax in total, and that is mainly in the form of advanced corporation tax, which the company can write off against its future tax liabilities. In short, Yorkshire Water—like the rest of the privatised water companies—is coining it at the expense of its customers and the taxpayer. But this summer's performance shows that Yorkshire Water is not just coining it; it is incompetent into the bargain.
The company's attitude to the drought has lurched from abject complacency to total panic. To be fair to Yorkshire Water, the Government's response has been the same. The Government—in the face of all of the evidence—have gone on proclaiming that water privatisation is a "brilliant success". They have blamed any problems that the industry has faced on the awful water company customers


who insist on having water. They have taken every opportunity to promote their hidden agenda of forcing everyone in the country to install water meters, despite the £4 billion to £5 billion that it would cost the country.
In pursuit of that unholy grail of water metering, Ministers—either deliberately or in total ignorance—have misled the House, and claimed in plain words that the customers have wasted more water than the water companies. They have patronised and insulted Labour Members who have challenged those misleading statements. That was why I published the full figures on leakages on 3 August, and published them for the first time in a form that people could understand. Would you believe, Mr. Deputy Speaker, that the form in which the figures were published previously was in litres per household per day on the basis of a 20-hour day? That appears to be a covert effort to decimalise time.
The figures showed that the companies lost 826 million gallons of water a day, or 500,000 gallons a minute. Of the total water lost through leaks, 78 per cent. was leaked from company water pipes, leaving customers responsible for just 22 per cent.—precisely the reverse of what Ministers told the House. Yorkshire Water's record on leaks is the worst in the country. It wasted 103 million gallons a day from its own pipes. That accounts for 87 per cent. of the total leaked, while the careful customers of Yorkshire, as one would expect—I am a Yorkshireman myself—were responsible for leaking only 13 per cent. of the total.
The water that the company will lose from leaks today would meet all the water needs of Halifax and Calderdale for a fortnight. The water industry's response to the publication of the figures was to claim that we were exaggerating and that the companies were spending £4 billion on dealing with leaks. That simply was not true. I published the real figures, which showed that, far from investing £4 billion in dealing with leaks, the companies were investing about £66 million in identifying and dealing with leaks. Of that total, Yorkshire Water was investing £11 million.
The first response from the Government was a statement from the Secretary of State for the Environment, in which he said that he was very impressed with what the water companies had done. So were the people who were not getting any water. The right hon. Gentleman went on to say that we should all stop moaning, and that Labour's condemnation of the leaks was "hot air".
Ten days later, the Secretary of State published a document which, in line with the Government's hidden agenda, promoted the idea of domestic water metering, and refused to set targets for cutting leaks by water companies. He also claimed—extraordinarily—that he had taken new powers in the Environment Act 1995 to promote the conservation of water. He conveniently omitted to explain that the Act placed that requirement not on the companies—as Labour proposed—but only on the customers.
The Secretary of State told people in Yorkshire that Yorkshire Water was a world-class company, and boasted that it was deploying its expertise in China and north America. Most people in Yorkshire did not share the right hon. Gentleman's thrill at that news. They took the view that the first duty of Yorkshire Water was to deploy its expertise—such as it is—in making sure that Yorkshire

people get the water that they need and have paid for. Most people in Yorkshire do not like seeing their money going instead into speculative projects in China and north America, or, for that matter, into speculative shopping malls in Leeds. But that is what Yorkshire Water has been doing with its customers' money.
A week later, the Secretary of State changed his tune again and said that he might take action to require the water companies to cut their leaks, but he added that that would have to await the National Rivers Authority report on water conservation. Six weeks later, the NRA published its report, which vindicated everything that we had been saying. It said that reducing leaks was the most effective way of conserving water and that cutting leaks was twice as effective as installing water meters.
It is not just the experts who support what Labour has been saying. Throughout the country, people know that leaks are the main cause of the water shortage. They know that water companies are not doing enough to reduce the leaks. They know that compulsory water metering, which the Government support, would be an expensive racket at the expense of the customers. They also know and feel strongly that the water companies should never have been privatised in the first place.
Nowhere do people feel that more strongly than in Yorkshire. People have experienced hosepipe bans and drought orders. They have seen Yorkshire Water harming the environment by draining too much water out of precious lakes and rivers. They have seen Yorkshire Water forced to interrupt people's peaceful occupation of their homes and damage the environment by dispatching huge fleets of tankers all over the county. This is the county where one third of all water distributed leaks out of the company's pipes. This is the county where the water company continues to blame its customers for the shortages. This is the county where the water company officials have the cheek to suggest that local firms should shut down or relocate because they have the audacity to use too much water. This is the county where the company first promised to guarantee water supplies to residential homes for the elderly and then went back on its promise. This is the county where the company said that it needed drought orders, then that it did not—in the middle of the Tory party conference—and then that it did. Now it is not quite sure.
The company ignores its customers. As we have heard, it ignores the needs of local business. It ignores the views of the fire brigade. It ignores the views of the local authorities. All in all, the record of Yorkshire Water is a shambles and a disgrace. That shambles was created by the original privatisation of the water industry and the stupid and expensive way in which it was gone about at the expense of the taxpayers. It has been augmented since by Government complacency and the incompetence of the overpaid bosses of the company.

Dr. Keith Hampson: If the hon. Gentleman checked the figures, I think he would find that in the period around 1976, when the industry was nationalised and accountable to the then Labour Government, investment levels were halved by the Labour Government. That must have had a major effect on the problem of bad pipes, rotting sewers and the leakage factor. If the investment had gone in under the Labour Government, we would not be in the mess that we are in now.

Mr. Dobson: Thank you, Mr. Rip Van Winkle. The Tory party nationalised the water industry, taking it out of the hands of the local authorities that had run it so well. No doubt the hon. Gentleman voted for that. Certainly, the Secretary of State voted to nationalise the water industry. They should know that when the water industry was nationalised, average investment per year under the Labour Government was a third higher than the average under the Tory Government. As the hon. Gentleman would have known if he had come into the debate, virtually all the investment since has been entirely at the expense of the taxpayers and drawn from the massive subsidy that the companies were given at the time of privatisation.
Yorkshire Water's insulting answer to the catalogue of lunacy that we have heard about today is to apply, God help us, for a charter mark and appoint a new public relations official on £80,000 a year. No wonder the people of Yorkshire are sick to death of what has been happening. No wonder they are turning in greater and greater numbers to the Labour party, the party of the Members of Parliament and councillors who have spoken up for local people and local businesses and have not proved to be apologists for Yorkshire Water.
Labour's representatives have told the truth. They have exposed the facts and suggested sensible answers to the problems. Conservatives have always defended the pay and perks of the water company bosses. Now they are even reduced to defending their leaks. I remind the House that leaks are running at half a million gallons a minute. That means that during this debate, 45 million gallons of water will have leaked out of the water pipes of the companies and 6.5 million gallons will have leaked out in Yorkshire alone.
The Secretary of State has sent the Minister along to defend the position. He is going to have a job because it is what the Tory party believes in—subsidised private monopolies ripping off the public.

The Minister for Local Government, Housing and Urban Regeneration (Mr. David Curry): The purpose of this debate should be to try to give some reassurance to the people of Yorkshire and to show them that we understand their deep concerns. I should be very happy to engage in party political warfare at any time at the hon. Gentleman's invitation, but the purpose now must be to get some facts before the people of Yorkshire.
I should like first to deal with what has already been done and then look a little towards the future. At the moment, some 35,000 tonnes of water is being tankered daily into Leeds, which is about 17.5 per cent. of demand; 20,000 tonnes of water is being tankered into Kirklees, which is about 18 per cent. of the demand; and 12,000 tonnes of water is going into Calderdale, which is 24 per cent. of the demand. Up to now, we have granted 20 drought orders, the most important of which have dealt with four categories of activity: first, reducing the flow of water from the reservoirs in the Pennines back into streams that were originally designed to boost the supply of water for the wool textile industry in Yorkshire in the 19th century; secondly, giving Yorkshire Water the authority to take water from the Ouse and the Wharfe; thirdly, enabling Yorkshire Water to tap special sources of water, such as ornamental reservoirs and water-skiing surfaces; and, fourthly, prohibiting non-essential uses.
Yesterday my Department approved an order to allow the use of borehole water and for the owners of the boreholes to sell or to give that water to other people. We have received—or, I imagine, will receive within the day—applications for two new drought orders. We have also received a demand to cut further the compensation flows from reservoirs. Some 28,000 tonnes flows from the reservoirs into the streams daily, which represents about 20 per cent. of the supplies to Kirklees and Calderdale, and the application is to reduce that flow.
We expect to receive an order—I believe that the advertisement has already been published in Yorkshire—for further extractions from the Wharfe to be made at Arthington to supply Leeds and at Lobwood in the Hollins for Bradford. We shall consider those orders as rapidly as we are permitted to do under the statute. We shall also, however, fully take into account our wide responsibilities when we consider those orders, including environmental considerations.
A number of hon. Members mentioned the question of the pipeline. I think that it would be helpful if I were to make a few remarks about that. Three questions have to be settled. First, the National Rivers Authority has some concern about the environmental effect of water from the Tees being added to the Swale and the Yorkshire water system. That is a legitimate concern and it clearly has to be decided. Secondly, in regard to the level of extraction at Moor Monkton, there is a problem of pumping capacity and the pipelines. One could argue that the most urgent need is for pipeline work on the link between Moor Monkton and Eccup and for the pumping facilities to be put in place. Thirdly, there is some concern about the level of pesticides in the water from the Ouse and the ability to treat it before it enters the drinking water system. That is again a legitimate environmental concern. If one were to act, with due risk, immediately, people would later ask, "But were the serious issues that were raised borne in mind?"

Mrs. Mahon: Will the Minister give way?

Mr. Curry: No. I have not intervened on other people and I have very little time.
I must make it clear that I believe that Yorkshire Water must as a priority deal with the bottleneck at Moor Monkton. I believe that it has to continue work on the pipeline option, and I wish to make it absolutely clear that no planning problems will be allowed to stand in the way of the construction of that pipeline. We can authorise the construction through the use of drought orders, and we will not hesitate to do so.
On the purchase of water, I shall make one thing clear. When one water undertaker has to take water from resources controlled by another, it has always had to meet the reasonable costs. Under the privatisation arrangements, that system continues. If there is no agreement on the reasonableness of the cost, the Office of Water Services has to arbitrate.
I must inform the hon. Member for Wansbeck (Mr. Thompson), therefore, that I am moved by his concern for the shareholders of Northumbrian Water, but there might not be quite the bonanza that he anticipates on their behalf because of the requirement that the water should be sold at a reasonable cost. I certainly welcome the embracing of the capitalist ethic by at least that member of the Labour party, however.
The postponement of the earlier public hearing was due to a Government decision in the light of advice from the National Rivers Authority to allow those major abstractions from the Wharfe.
The public inquiry has just concluded and we have not yet received the inspector's report, but my advice is that we are likely to do so today. I wish to make it absolutely clear, as I have made it clear in Yorkshire and at a series of meetings with Yorkshire Water, that there is no question of the Government simply receiving the report, allowing a decent interval to pass and signing it through. Before he even contemplated the emergency drought orders, the Secretary of State would want to be convinced that they were the last of all possible last resorts and that the only alternative was to run out of water. I must emphasise that point because any impression that the inquiry was a mere formality to provide cover for a Government decision is not true. I have spelt that out categorically in those terms to Yorkshire Water as clearly as I am spelling it out in the House.
Let me spell this out clearly, too—in the present circumstances, that order will not be made. The measures already taken, particularly the reduction in compensation flows from reservoirs, even given below-average rainfall, will permit the reservoirs to fill. Until now, the problem has been the constant decline in reservoir levels and concern about the quality of the water that was left at the very bottom once they got to between 11, 12, 13 and 14 per cent. of capacity. The measures that have been taken should permit the reservoirs to fill. If we were to accede—I emphasise the conditional because we have to take the decision in the light of all our responsibilities, including environmental ones—to the two most recent requests and had the option to change the terms of those requests in giving the consent—it is not merely a question of saying yes or no, because we can vary them—the reservoirs would be able to fill more rapidly.
The hon. Member for Bradford, West (Mr. Madden) asked about the compensation arrangements. The statute lays down the position. If an emergency drought order interrupts supply, compensation is ruled out under long-standing statute law, which has stood under both Labour and Conservative Governments. It is for the Director General of Water Services to decide to hold an inquiry. As the House will know, he has been following the matter very closely indeed.

Mrs. Helen Jackson: Will the Minister give way?

Mr. Curry: No.
What Yorkshire Water does in terms of its own inquiries is entirely for it to decide, but it is important for us to draw conclusions from what has happened this year, to ensure that it does not happen again. I have made it clear once again to Yorkshire Water that, irrespective of the weather conditions and the rainfall, we must not find ourselves in a similar position next year. That means a sustained programme of refilling reserves in the reservoirs in the coming months and of putting right some of the faults in the system.
As I have said in public and to the company's face repeatedly, a justifiable criticism can be made of the company. At the turn of June or in July last year, it should have realised that demand was going through the roof. It

was rising rapidly and the company did not respond quickly enough and placed too great a hope in the weather eventually changing. If it had acted more rapidly, particularly to reduce compensation flows out of reservoirs into streams, we would have been in a much better position now. At their height, the flows were about 80,000 tonnes a day, which is half the entire consumption of Calderdale and Kirklees. Frankly, the water was running to waste.
Action has to be taken on four fronts. The first is for Yorkshire Water. It is urgent that the company addresses itself to the problems of the distribution grid within Yorkshire. It inherited an extremely old, unmodernised and out-of-date grid and serious problems are caused by, for example, subsidence from mining, which makes it difficult to improve and replace the system—[Interruption.] I hope that hon. Members will recognise that fact when Yorkshire Water has to replace the grid and improve the mains in places such as Halifax. It will mean considerable disruption because of the road and engineering works that it entails. I hope that they will not complain about the disruption when that work takes place.
Secondly, Yorkshire Water has to ensure that it is able to secure the necessary long-term water supplies. It must study rising demand and the possible trends and realise that, in five out of the past seven years, there have been hosepipe bans, which should have been a litmus test for the problems to come and led it to take action earlier this year. Now the company has to set out clearly the actions that it will take in the medium and long term. That means dealing with the leaks and reviewing the compensation water regimes, which the Secretary of State has already undertaken to review.
It is a matter of renewing the grid network within Yorkshire so that capacity is improved, particularly to enable the company to move water east-west. As the hon. Member for Bradford, North (Mr. Rooney) said, one of the problems has been that rainfall has tended to be in the east, whereas the historical pattern was for rain to fall over the Pennines. The company has to consider improvements in pumping capacity and the overall supply position. That may include looking for new, long-term supplies, including Kielder Water—no doubt to the eventual long-term benefit of shareholders in that company.
The Government have made it clear that, if the companies do not do well enough, we shall consider statutory leakage reduction targets.

Mrs. Ann Taylor: Consider!

Mr. Curry: That is a responsibility that should fall on the companies. That is why there is a statutory undertaking. Although the Labour party is deeply in love with the Armageddon strategy, and would love Yorkshire to run out of water, which would give it political satisfaction, I do not intend to give it that satisfaction—[Interruption.]

Mrs. Mahon: Will the Minister give way?

Mr. Curry: No.

Mrs. Mahon: On a point of order, Mr. Deputy Speaker. That is the most outrageous and insulting remark and the Minister should withdraw it immediately.

Mr. Deputy Speaker (Sir Geoffrey Lofthouse): Order. That is not a point of order for the Chair. In the few minutes available, I should have thought that the House would want to hear what the Minister has to say.

Mr. Curry: I realise that there is colossal concern in Yorkshire about the situation. I have tried to outline the position and what can be done about it. The Labour party has engaged in a constant programme of political barracking, which I do not think will be appreciated by the people who are concerned in Yorkshire. It is a tone different from that of the constructive conversations that I have had with Labour Members from Yorkshire. I wish that that had been carried through into this debate and not what we have heard this morning.
I can well appreciate that, for Yorkshire Water, the satisfaction of shareholders matters. I can equally understand the importance of the views of its City analysts and financiers. However, the people who matter most of all are the customers and consumers of Yorkshire Water, because they have nowhere else to go. They must be given priority in the future investment programmes of Yorkshire Water.

Education Funding (Northumberland)

Mr. A. J. Beith: We have plenty of water in Northumberland. It is funds for schools that we are short of. I am tempted to offer to trade one for the other because we are in such a desperate state and the Minister has so far not been able to offer us much. We intend to seek more from him today.
In September, a leaked memo from the Secretary of State for Education and Employment acknowledged that there is a perception that schools are underfunded and that peace in the classroom threatened. If that is true at national level—and it is a remarkable admission—it is even more true in Northumberland because of specific difficulties about the funding of education in our county.
In the already underfunded education system, there are authorities which have been placed in an especially difficult position by the failure of the standard spending assessment mechanism, which does not take adequate account of regional differences and the additional pressures that face some areas. That problem is made worse by the capping system. Some authorities threatened to set deficit budgets because they felt unable to make yet more cuts.
Perhaps one of the greatest sets of difficulties is that faced by Northumberland, which lost about £7 million when the SSA replaced the former system of education funding. The authority was particularly disadvantaged by two factors. The first was the additional educational needs factor. Northumberland lost about £5 million because of the large increase in the percentage of the SSA formula that was devoted to additional educational needs, which are needs different from those prevalent in Northumberland. The other factor was area cost adjustment, which was also increased substantially when SSAs were introduced, and affected Northumberland especially badly.
Northumberland is geographically the largest of the shire counties; its population is the smallest except for that of the Isle of Wight. That means that it has lowest population density and all the problems that that brings. Sixty out of the county's 146 first schools have fewer than 100 pupils. A number are very small, with fewer than 25 pupils, but are in remote places where it is necessary to retain a school. Small schools are expensive to maintain.
Distance is another problem. Pupils in some parts of the county have to travel 15 or even 25 miles each way to school, which is a major cost to the budget. The extra cost arising from small rural schools is about £1.3 million; rural school transport costs £3.7 million. Of course, if more schools are cut, the transport bill will go up. The sparsity factor in the SSA does not adequately compensate the county council for the extra costs.
As well as the initial losses, Northumberland county council has experienced four years of budget reductions which, according to its calculations, have wiped another £13.4 million from the education budget in real terms, based on a standstill budget. Considered year by year, in 1992–93 there was a £3.8 million cut against a standstill budget; a £4 million cut in 1993–94; a £4.6 million cut in 1994–95; and a £1.235 million cut in 1995–96. That last figure would have been higher if the county had not cut its reserves to £4 million. An auditor's report the year


before said that letting the reserves fall below £6 million would be imprudent, but the county felt obliged to take that action.
In money terms between 1992–93 and 1995–96, the total education budget for the county rose by 5.7 per cent., taking account of the changes in further education, when the retail prices index grew by 11.8 per cent. and the number of pupils in Northumberland schools increased from 45,960 to 48,454. At the same time, teachers' salaries, which make up four fifths of the budget, have increased by 28.5 per cent.
School budgets have been hit badly. Although in cash terms some schools have had their budgets increased since 1992, that increase has been undermined by inflation, teachers' salary increases and the additional costs of local management. The Office of Standards in Education warned that further cuts at one school would seriously affect its ability to meet the statutory requirements of the national curriculum. Pupil-teacher ratios in Northumberland have been deteriorating at an alarming rate compared with the average in the rest of England; compared with Scotland, the situation is worse still. We make the comparison with Scotland because it adjoins us.

Mr. Jack Thompson: I congratulate the right hon. Member on obtaining this Adjournment debate. There is another element that needs to be recognised in respect of Northumberland. I am told that, in a rural area in the right hon. Gentleman's constituency, there is a class of seven. That is fine, because it is a small rural school and it is the only service available.
In my part of Northumberland, we now have classes of more than 30 to 35 on some occasions. The big problem in Northumberland is that four fifths of the population lives in the south-east corner and the rural areas are sparsely populated. They still require education services, but they have to be provided on a two-level basis. We have a shortage of spaces in the south-east and a surplus of spaces in the rural parts.

Mr. Beith: I am grateful to the hon. Gentleman for underlining the point that I made earlier about the cost of maintaining schools in scattered rural areas. It is an essential cost because it would not be reasonable to remove schools altogether from areas as remote as some of the places concerned.
The average pupil-teacher ratio in England was 17.4 per cent. in 1993. It was 15.4 per cent. in Scotland; in Northumberland, it was 19.4 per cent. Since then, it has worsened. The Fairshares campaign, which is an independent group of parents in Northumberland who have united to campaign for adequate funding, produced a detailed report on the issue. It carried out a survey of Northumberland schools and found that among respondents, 85 per cent. of schools had experienced an increase in the pupil-teacher ratio between 1991 and 1995.
Class sizes are similarly bad when compared with other areas. The average for England and Wales is that around one quarter of primary pupils are in classes of 30 or more; in Northumberland, approximately half are. That figure relates primarily to the towns and the urban, south-eastern part of Northumberland; classes have to be smaller in rural areas where pupil numbers are low. On top of that, schools have to rely on parents to raise money for

essential equipment and to continue the employment of existing staff. The vast majority of schools surveyed made use of money raised by parents for such purposes—almost a quarter of it for essential items.
The leadership of the county council responded to the crisis in which it was placed by proposing earlier this year to close 10 first schools, six of them—Hipsburn, Acklington, Linton, Milfield, Horncliffe and Thropton—in my constituency. A number of those 10 are popular schools whose pupils cannot satisfactorily be accommodated elsewhere. Others are village schools in places distinct or remote from the nearest community that would still have a school. It was an unwise response to an admittedly difficult situation. Indeed, the county council has now dropped the proposals and is concentrating on trying to get better funding.
The funding changes have placed Northumberland towards the bottom of the spending tables for education. The Chartered Institute of Public Finance and Accountancy statistics show that Northumberland is ranked towards the bottom of the table of potential schools budgets per pupil in English counties. Oxfordshire has more than £200 more potential schools budget per pupil than Northumberland.
This week, I received a letter from the head teacher of King Edward VI school in Morpeth, in the constituency of the hon. Member for Wansbeck (Mr. Thompson), which takes many pupils from my constituency and has an outstanding record. She used to be the head of a school in Cleveland. She calculated the different funding that would have been available to her school in Cleveland. The difference amounted to more than £450,000. She asked:
Would you please explain to me why I need so much less money to run my school in Northumberland?
I was recently told about a school which was forced to ask parents to raise £25,000 to bring its facilities up to the standard expected under the national curriculum. The school failed in three areas when it was inspected by Ofsted and all of them were due to lack of funding.

Mr. Ronnie Campbell: I congratulate the right hon. Gentleman on getting this debate because it is a matter that needed to be debated. Can he develop the argument about nursery vouchers? The Government are going to give £1,000 per child throughout the land. If that goes for nursery school pupils, should not the figure apply to all pupils throughout the land? Would not that be a better system of financing local schools?

Mr. Beith: I am not sure that I would want to construct the funding system on that basis. The fact remains that the amount available per pupil, which is what the hon. Gentleman was getting at, in Northumberland is very much less than in comparable areas and much, much less than in places such as inner London. Northumberland is being asked not just to make efficiency gains, but to make cuts, time and time again. Schools are struggling desperately in the face of that. The chairman of governors of one high school wrote to tell me that his school has been forced to make several part-time and full-time teachers redundant to balance the budget. He pointed out that that would have been avoided if Northumberland had only half as much extra per pupil as some authorities receive.
Another constituent has written to tell me that in her first school, caretakers and meal supervisors are doing extra duties for no remuneration and giving up their


complimentary lunch to save the school £5 per head per week. The school is dependent on the charity and good will of its staff. Another high school lost three teachers, a caretaker, out-of-school activities and staff preparation time. There was an increase in class sizes and the school could not repair its heating system, all as a result of recent cuts.
There is enormous strength of feeling. More than 3,500 people in Northumberland have written to the Secretary of State for the Environment about the standard spending assessment as it affects education funding. I could find many more examples of the way in which schools have had to cut staff, deliberately taking on far less experienced staff in an attempt to reduce costs. Perhaps the final word should go to the constituent who wrote to the Secretary of State for the Environment:
I challenge you Mr. Gummer to go into a class of 42 reception children and get them changed and organised for a physical education lesson.
I am waiting for the Secretary of State to avail himself of the opportunity and to see just how difficult the task is. Large class sizes do not mean only the problems mentioned by my constituent, but half as many books again to mark and half as many parents again to see. All those problems make it impossible to give the level of attention teachers see as required.
When pressed, the Government say that it is not their fault; they claim that the fault lies with the local authority and its decisions on funding priorities. They say that the county council could solve the problem by managing its school budget more efficiently and they say that the schools could solve the problem by spending their contingency funds. None of those arguments holds water in Northumberland's case.
Northumberland spent more than the SSA levels on education, yet its education spending is one of the lowest in the country. It is prevented by capping from raising any more money. Between 1993–94 and 1994–95, Northumberland's SSA increased by 4.4 per cent. The Government were saying, "Yes, you do need to spend more money," yet Northumberland was allowed to spend only 1.75 per cent. more, so the Government were saying at the same time, "No, you cannot spend it." It is like saying to someone, "You can have £5 a week more pocket money, but I am inventing a rule that says that you cannot spend it." In this case, we are talking not about pocket money, but about essentials.
I am hardly a fan of the Labour administration in the county hall—indeed, I am often a critic of some of its decisions and spending priorities. However, it is accepted on all sides, including the Conservatives on the county council, that the problem cannot be resolved just by changing the county's spending priorities. Indeed, in 1990–91, the Audit Commission's view was that Northumberland was not mismanaged. The commission said:
Our overall impression is that the Authority is well managed at both member and officer level.
Since then, the costs of education other than in schools have been reduced by almost a quarter. Comparisons with other areas on this point are favourable. In a sample of comparable counties, including Buckinghamshire, Lincolnshire, North Yorkshire, Norfolk and Cumbria, Northumberland's costs were the lowest. Administrative costs as a percentage of the potential schools budget were,

at 1.93 per cent., only slightly higher than those of Cumbria and Lincolnshire, and lower than those of the other authorities mentioned. Given the lower pupil numbers, that suggests that education administration in Northumberland is efficient.
The contingency funds are largely mythical. Schools have no more than two weeks' operating costs, if one averages it across the board, kept as contingency funds. Any small business would regard that as a small margin, especially when some of the funds are earmarked for essential projects. In a very small school, one family leaving the area can slice more than that two weeks' contingency fund from the school's budget for a year. Schools have to keep something in reserve.
The Government and the Prime Minister claim that education has become a priority. This is the opportunity for them to match words with action. The Government should bear in mind the £7 million that was lost through changing the funding arrangements and consider restoring that funding. I urge them to review the standard spending assessment formula to give a fair allocation to Northumberland. The Department of the Environment is reviewing the area cost adjustment, but the review needs to consider the particular problems highlighted by underfunding in Northumberland. We need action sooner than the time scale of the review will permit.
I fear that if we find in the Budget in a week's time that there is some more money for education, it will all be eaten up to match the existing amount that local authorities spend over their standard spending assessments and to deal with new responsibilities, such as the extra costs for special needs which are now required—that is estimated nationally to be more than £400 million—new rules on seat belts in school transport, EC legislation on part-time staff, new school transport entitlements and local government pension scheme costs. In those areas, any new money over and above inflation that the Government promise will be eaten up, not just in Northumberland, but in other places.
In Northumberland, we have a large need over and above those other needs. I plead with the Minister to recognise that need and to realise that it is accepted across the board, by people in all political parties on the county council and here in the House. There are Northumberland Members from all three political parties present in this debate. I urge the Minister to respond to the plea.

The Parliamentary Under-Secretary of State for Education and Employment (Mr. Robin Squire)s: I am grateful to the right hon. Member for Berwick-upon-Tweed (Mr. Beith) for initiating this debate, thus giving the House an opportunity to consider how education is funded in Northumberland. I also welcome hon. Members on both sides of the House to the debate. I make one introductory comment in response to an introductory comment by the right hon. Gentleman concerning a certain memorandum. I reiterate what my right hon. Friend the Secretary of State for Education and Employment has said more than once. She did not devise, write, sign or use that memorandum. Although we never comment on leaked alleged memoranda, it is only fair to put that point on record in light of the right hon. Gentleman's opening comment.
Inevitably, what I say today can, in part, be only a curtain raiser for the announcements that will be made next week by my right hon. Friends. Tempting though it is to say much more, I must decline invitations, however kindly given by the right hon. Gentleman, to say more about funding for education in Northumberland for 1996–97.
The first education expenditure matter on which we all need to be clear is that Northumberland county council, like every other local authority, is responsible for setting its education budget and deciding the priorities between and within services. The council has the final say on how much is spent on education and how much is spent on other services.
We heard—I expected it—a lot from the right hon. Gentleman about reductions, past, present and future, in Northumberland's education budget. I have already made it clear that I can say nothing about next year's financial settlement except this. Neither hon. Members nor Northumberland county council can yet have a clue about the level of that settlement. Any talk, therefore, of budget cuts must be purely speculative. Frankly, it is irresponsible for local authorities to ring alarm bells at this time of the year when they cannot know how much money they will have in 1996–97. I make it clear, for the avoidance of doubt, that a number of local education authorities, including Northumberland, Lancashire and East Sussex, have indulged in that practice. At the very least, it does not assist in rational discussion of these matters.

Mr. Jack Thompson: Is the Minister aware that I am chairman of governors of one of the schools in my constituency, Newbiggin middle school? Last Friday, the board of governors had a meeting. In our budget preparations, we had to take into account the possibility of having a reduction of between 1 per cent. and 3 per cent. That is the simple logic that one must use in planning and preparing for an academic year for a school. We also have to consider the next year, the year after and the year after that. We have to take into account the welfare of the pupils, the staffing levels, the provision of resources and the building itself—the whole gamut of running a school. One has to prepare and consider those factors and take them into account, otherwise one is caught with one's pants down.

Mr. Squire: I am grateful for the hon. Gentleman's work in his capacity as chairman of governors. Of course I endorse the point that all governors and all local authorities must plan ahead. My point was specific. I speak as the recipient of many letters, from across the country, which have been caused by local education authorities describing now, in advance of next week's settlement, exactly the cuts or whatever they will face. I repeat for the hon. Gentleman and the House that those figures cannot yet be known and that such talk is, at this stage, alarmist.
The right hon. Gentleman said that Northumberland has been forced to cut millions of pounds from its education budget this year. That is not true. Northumberland has been able to increase its education budget by some 2 per cent. this year and is able to spend over £200 million on all services. That, I submit, is not bad in a year in which local authorities face a tough, but fair, settlement.

Mr. Beith: Will the Minister give way?

Mr. Squire: I wish to make progress. The right hon. Gentleman made a number of points and in fairness to him I would like to reach them. If I have time, I will willingly give way. As he knows, I do not refuse to give way.
So from where does the talk about cuts come? The county council is not cutting what it is actually spending; it is drawing up a shopping list of additional spending, fully uprating for all price and income movements, and then cutting back on what it would ideally like to spend if it could buy all the items on that list.
We have to recognise the wider background to the financial settlement for Northumberland. The Government have made it clear all along that this year's settlement has been tough. That is necessary to constrain increases in public expenditure, since local authority expenditure accounts for roughly a quarter of all public expenditure. The whole of the public sector should be looking to meet pay and price pressures, and to make efficiency savings. The long-term future of funding for education in Northumberland depends on ensuring that the economy is placed on a firm footing and that Government keep a firm grip on inflation.
We should give more attention to what Northumberland county council is doing with the funds it receives from central Government. There are important questions which schools and parents will want to ask the county council. Is it achieving value for money? How many surplus places are there in Northumberland schools and what does the county council intend to do about them? I shall not exchange comparative figures because that would be tantamount to telling Northumberland exactly what it should do, but I shall say that the county council has some way to go to catch up with what a number of LEAs are already doing.
The right hon. Gentleman mentioned class sizes in Northumberland schools. Despite the horror stories that appear about class sizes of 30, 35 and more, the facts are that the latest available data show that the average class size in Northumberland schools is 27 in the case of primary schools and 23 in the case of secondary schools. If there are individual class sizes of over 30, it is up to the county council in the first place, and those managing school budgets in the second, to explain to parents why those particular class sizes are so far above the Northumberland average. There could be any number of reasons: the level of teaching done by the head teacher and deputy—

Mr. Beith: The rural factor.

Mr. Squire: I fully concede that and I will say more on the rural factor if time permits.
Other reasons include the degree of non-contact time, a bulge in the pupil population, the physical size of classrooms and the general organisation of teaching and learning at the school.
I remind the House of the main finding in the recent Ofsted report based on inspectors' independent observations. There is no simple link between the size of class and the quality of teaching and learning within it. The selection of teaching methods and forms of class organisation have a greater impact on learning than the


size of the class. For example, how well classroom assistants are used alongside teachers is an important factor influencing the quality of teaching and learning.
It is interesting to compare the quality of education in Northumberland with schools elsewhere with smaller class sizes. Look, sadly, for instance at Hackney Downs school, where spending is two and a half times the national average per pupil, and the pupil-teacher ratio is 8:1. That illustrates my point, particularly as the coincidence of small class size and failing schools is by no means limited to Hackney Downs.

Mr. Peter Atkinson: Pupils in Newcastle get far more funding per pupil than those in schools in Northumberland. Newcastle gets £651 per head of population in grant while Northumberland gets £482. Northumberland is in the top half of local authority schools in the league table, but Newcastle is second from the bottom and is clearly failing its children.

Mr. Squire: My hon. Friend makes a very important point. I will deal with the SSA system on differential funding, but he must be right to say that, at any given level of funding, there is a considerable difference in the outturn as a result of that funding, as we have seen most recently in the tables published this week. In particular, schools in disadvantaged circumstances can perform tremendously while others in similar circumstances cannot currently do so. I know that heads and governors in those circumstances will revisit their own schools' experience.
I thought optimistically that I might get away without discussion of the standard spending assessment, but I understand why the right hon. Member for Berwick-upon-Tweed raised it. Next week, my right hon. Friend the Secretary of State for the Environment will announce his proposals just after the Budget, but I can make two points about the SSA methodology. Both will be familiar to hon. Members but they none the less concern two essential elements of a methodology which would purport to be fair.
The first is that the education SSA system does not set out to allow the same level of spending for each pupil, nor should it. That is the point raised by the hon. Member for Blyth Valley (Mr. Campbell). The system aims to provide funding for a common standard of service across the country, taking account of the fact that the costs of providing education vary from one LEA to next. As need varies from one council to another, so logically does poundage per pupil.
Each authority's education SSA reflects the relative costs of educating children in very different circumstances: in sparsely populated areas; in London and the south-east where labour costs are higher; and in areas of socio-economic disadvantage or with a high proportion of non-English-speaking children.
I know that the sparsity allowance is a particular concern to Northumberland, and the right hon. Member for Berwick-upon-Tweed mentioned the problem of running an education service in a scattered rural area. The fact is that, alone of all the factors in the education SSA

formula, including the much-loved area cost adjustment with which I shall deal shortly, the weight given to the sparsity allowance is 50 per cent. higher than the raw statistical evidence would suggest.
Alongside all the representations I receive about a bigger slice of the SSA cake for rural authorities, I have to consider the position of those authorities that object to that 50 per cent. judgmental uplift. They might ask: why should the Government not reduce it, or increase the weight on additional educational needs, or even uplift the area cost adjustment by 50 per cent. as well? All those arguments have to be balanced against each other. Our aim is always to arrive at the fairest formula possible for distributing grant between authorities. In consultation with the local authority associations, we will continue to consider carefully the arguments for and against making changes.
I want to say a brief word about the area cost adjustment, since I know that it is a particularly controversial aspect of the formula that hon. Members on both sides of the House have raised with the Government. The right hon. Member referred to the level of support going to local authorities in the south. Everybody agrees that there has to be an area cost adjustment. Not even Northumberland county council would abolish it altogether. It is the unanimous view of the various local authority associations that some recognition of the factors that lie behind it must be made. Those LEAs that get it say that they need to spend even more, and those that do not say that the money needs to be redistributed to them. That is perhaps unsurprising.
The Government, however, want to make progress on this issue. As the right hon. Gentleman mentioned, my hon. Friend the Minister for Local Government, Housing and Urban Regeneration met leaders of the local authority associations on 16 October to discuss the area cost adjustment. My hon. Friend proposed that we should set up an independent review of the area cost adjustment to try to ensure that it receives uniform support among LEAs. I know that that review will be welcomed by many hon. Members even if, inevitably, the consequence of that review cannot reasonably feed into the announcement that the Secretary of State for the Environment will make immediately after the Budget.
The right hon. Member for Berwick-upon-Tweed briefly mentioned capping. I know that there is a wide range of opinions on that subject, but capping is important as part of the Government's wider economic objectives.
We should be clear in our minds about the way in which capping works. It does not force local education authorities to cut their budgets; rather it limits the rate at which they can increase them. As I mentioned at the start of my speech, there is little that I can say today about the role of capping in 1996–97. The right hon. Gentleman will have to wait—but only a short while—for the relevant announcement to be made.
This has been a short but wide-ranging debate and I am grateful to the right hon. Gentleman for allowing me the chance to put the record straight on several issues. I am sorry none the less, especially as a result of the coincidence of timing, that I cannot say more about the settlement for 1996–97 now.

Portsmouth (Fleet Maintenance)

1 pm

Mr. David Martin: I am most grateful to Madam Speaker for granting me a timely opportunity to mention the fleet maintenance and repair organisation, the future of which vitally affects, not only my constituents, but those of my hon. Friends and neighbours, whose strong and assured support I thoroughly welcome.
The latest review into the planned market test of the FMRO plainly threatens its continued existence in carrying out docking and essential defects requirements, as well as being responsible for organising a great deal of unscheduled work on ships.

Mr. Peter Griffiths: I realise that my hon. Friend has only a short time. I interrupt him only to pick up the argument that he made to start with, which was that we are debating not a narrow issue, but one that widely affects the whole Portsmouth travel-to-work area and the economy of southern Hampshire. Only a firm assurance that the FMRO will continue as a single unit with a solid work load will remove the threat to the necessary morale of the economy in that part of the country, extending much wider than the constituencies in Portsmouth.

Mr. Martin: I am most grateful to my hon. Friend for making those valuable points, which I am sure will be considered by my hon. Friend the Minister.
I concede at once that it is necessary always to consider whether public money is being spent properly or should be spent at all. That is the case with every Government Department, and the current public expenditure round is no exception.
In defence, the priority is, rightly, to spend for the maximum benefit of the front line, but it is my main purpose in this debate to show that the front line—in this case front-line surface ships of the Royal Navy and the people who serve in them—is indeed best served if the finest Royal Navy ship repair facility, the FMRO, is allowed to continue its work, made even better by the market-testing operation to which Ministers and Royal Navy personnel are already signed up, and which, unlike the position at Devonport, is attracting very healthy commercial interest from some very hard-headed business men.
In making such claims, I do not rely on the proud traditions and sentiments stirred by 500 years of Portsmouth dockyard's unparalleled contribution to shipbuilding, refitting and repair, although, as a Conservative, such considerations weigh with me, as I am sure that they do with my hon. Friend the Minister.
Today, I rely wholly and only on the present-day facts. The more that those facts are considered dispassionately on public expenditure grounds as well as grounds of front-line operational efficiency and effectiveness, including the well-being of sailors and their families, the more rational minds are driven to the conclusion that it would be madness to interfere with the present planned arrangements for the FMRO, and plain common sense to give it the opportunity that it deserves to serve the fleet on the new basis envisaged.
What are the powerful arguments for keeping a facility for maintenance and repair work at Portsmouth? First, plainly the review of the market-testing operation is being

offered up as a cost-saving measure, probably also in an attempt to help the faltering privatisation plans and the position at Devonport. However, far from public money being saved, I have heard a reliable prediction that, if all the effects of messing about with the successes of Portsmouth to transplant elsewhere are taken into account, the cost would be at least £200 million.
Secondly, 58 per cent. of the surface fleet—42 ships, including the three carriers—is based in Portsmouth. The cycle of ships at sea these days places greater pressure on their operational capacity, requiring speedy access to an efficient and flexibly run repair and maintenance facility between refits.
A good example is the carriers, one of which, Invincible, soon to be replaced by Illustrious, is required to be on station in the Adriatic because of the continuing unstable position in Bosnia and the former Yugoslavia. That requirement shows no sign of ending while front-line British troops are involved in that theatre, whether helping to keep the peace or implementing any peace settlement.
Although programmed ship projects comprise only 4.25 per cent. of the total naval ship repair programme, they are essential to operational effectiveness and availability of Portsmouth ships. Overhead costs are shared with maintenance of the operational base. It would, for instance, be potty to separate the utilities from the market-testing process. Any transfer of work elsewhere is therefore highly questionable in savings terms. Transferring DEDs work to Devonport would not make a significant impact on the position in Devonport, but it would mean everything to Portsmouth.
Thirdly, if more than half the surface ships are based in Portsmouth, it would be nonsense not to have facilities for their repair and maintenance on hand. If the facilities were to be removed elsewhere, base porting would probably follow, and the finest docking provision in Europe would be run down. As my hon. Friend the Minister is aware, base porting is a vital part of the harmony rules for sailors serving on board, who are entitled to a certain number of weeks each year in their base port.
Many years have been spent and consistent policy decisions made, concentrating not only on ships but on administrative headquarters and training establishments for the Royal Navy in and around Portsmouth, not for the fun of it but because greater consideration for home and family life, for summer leave, school holidays, Christmas and so on is very much part of recruiting for, retaining in and running a modern Royal Navy. That should also be an important consideration for a modern Conservative Government. Any proposal that claims to make questionable financial savings while running counter to harmony rules should be rejected.
Fourthly, I shall discuss the likely commercial outcome of continuing with present plans for market testing, assuming that it is followed by a desperately needed long period of stability, at least seeing through the first few contracts under the new arrangements before any further review is even considered, let alone announced. In that context, the prime consideration is repair facilities for the Royal Navy.
Even granting that at present there is a national overcapacity of ship repair facilities—which I believe these days is debatable—instead of taking the negative "let's shut something down" line, let us admit that nowhere in Europe has greater potential to develop a


ship docking and repair business on a sound international commercial basis, harnessing private sector companies and resulting in the cheapest possible service for repairing and maintaining ships of the Royal Navy, than Portsmouth dockyard. We can find evidence for that, not only in the private sector companies so keen to join the tendering process at Portsmouth, but in the lack of commercial investment in new ships in recent years, making more repairs needed, or likely to be needed, for those that are in use. In addition, all ferries are likely to need docking and repair facilities as new safety standards require reconstruction work. Is that to be done at Cherbourg rather than Portsmouth because we have not the nous or the nerve to compete in the market—under a Conservative Government, no less? With such opportunities, we would be mad to break up such a successful going concern as the FMRO, and for what?—to leave the docks to silent decay.
Speaking about a going concern, it is wholly relevant to the commercial potential of the FMRO to continue service to the Royal Navy, and wholly relevant to that consideration are the present Portsmouth work force, now numbering 1,450 people. I cannot speak highly enough of the massive co-operation of the trade unions and the whole work force in recent times in adjusting to new, flexible working and training arrangements, improvements in productivity and efficiency, co-operation with contractors, and mixed skills working, which has shown a dedication to meet the challenge of the market-test operation every bit as impressive as the examples that used to come out of Japan alone. Management and those on the shop floor have united in their determination in a way that even a casual visitor to the FMRO can feel in the air. That feeling is even more pronounced when one has the privilege of being shown round the facilities by a human dynamo such as Mr. Keith Crockford. One of the greatest disadvantages of the review of the market test process is that, as well as the risk of commercial bidders cooling off, the enthusiasm, energy and high morale of the FMRO staff may be undermined.
I am not exaggerating when I say that the staff believe, however wrongly, that the review will result in the closure of the FMRO. In that case, all the enthusiasm, energy, co-operation and the current reorganisation of buildings and workshops will have been for nothing. That must not be allowed to happen—it would be madness to allow it. Before any more harm is done, the decision must be taken—the sooner, the better. The damaging limbo must not last a day longer than necessary.
When I visited the FMRO last Friday, Captain John Crump, its chief executive, gave me an FMRO shield. Much as I treasure it, I am sure that he will give me another one if I pass mine to my hon. Friend the Minister on condition that he keeps it on his desk until a decision is quickly reached. As an additional reminder, I can tell my hon. Friend that the Greek historian Herodotus, with whom I am sure my hon. Friend is familiar, tells us that after the Athenians had embarrassed the Persian emperor Darius at Sardis, he commanded a slave to repeat to him three times at dinner each day, "Remember the Athenians." Over the coming days, until a decision is reached, I ask my hon. Friend to ask a civil servant to repeat to him three times each day while he tackles his health food snack, "Remember the FMRO."

The Minister of State for the Armed Forces (Mr. Nicholas Soames): I am grateful to my hon. Friend the Member for Portsmouth, South (Mr. Martin) and start by congratulating him on his success in securing today's debate on a subject in which he has taken a close personal interest over many years. I am delighted to see that my hon. Friend the Member for Portsmouth, North (Mr. Griffiths) is also in the Chamber.
My hon. Friend the Member for Portsmouth, South has been an assiduous champion of the interests of Portsmouth naval base. I wish to commend him for the way in which he so vigorously fights for his constituents' interests. I also join him in expressing my admiration for the FMRO, whose reputation is excellent. I was talking this morning to a captain who had commanded a ship that had been looked after by the FMRO. He spoke warmly and highly of the quality, speed and commitment of its work. I join my hon. Friend in paying tribute to the work force, to the way in which they throw themselves into their tasks so vigorously and to the excellence of the product.
I also pay tribute to the excellent service provided to the fleet by the FMRO, and shall respond as fully as I can to the understandable concerns over the organisation's future. Those concerns have arisen following my recent announcement that we are considering whether the current market-test route remains the most appropriate course of action in the current financial and operational circumstances. As my hon. Friend rightly said, the amount that we spend on defence and the way in which we spend it is a matter of continuing review. We have to undertake a broad range of tasks and we must get everything we can out of our limited and limiting funds. I hope that I shall be able to allay some of my hon. Friend's anxieties, although I cannot promise to do so.
The FMRO is a comparatively new institution, which was opened in 1984. It has a long and proud list of antecedents stretching back to the dawn of time. In 1495, King Henry VII ordered the construction of the world's first dry dock at Portsmouth. From that auspicious beginning, there developed over the centuries the infrastructural inheritance and the skills that characterise the naval base today.
In its heyday in the late 19th century, Portsmouth dockyard, as it was then known, more than doubled its capacity through a major expansion programme. It combined ship building and ship repair with a large range of ancillary activities. As my hon. Friend knows, the dockyard, and the city, saw the most distinguished service through both world wars, but the changing nature of the Royal Navy required progressive changes in its engineering support and maintenance facilities. In response to those changing imperatives, Portsmouth dockyard ceased to build warships in the late 1960s—HMS Andromeda was the last ship built there. In October 1984, following decisions taken in the 1981 defence review, and after a period in which it gave fantastic support to the Falklands task force, the dockyard was closed.
The fleet maintenance and repair organisation was conceived as a conscious attempt to redirect naval support resources to best effect in an era of considerable financial stringency. If there were a climate of financial stringency then, the pressures today are, proportionally, even greater.
Our priorities have not changed much since then. The FMRO was not supposed to be a scaled-down version of what had gone before. As the FMRO evolved, it enabled a major shift in emphasis that saw it taking a far greater role in supporting the active, operational fleet rather than devoting resources to ship repair work on non-operational ships.
As a consequence of the change in emphasis, ship refit work by the FMRO ceased in 1992. Since then, the organisation has specialised in providing a flexible and responsive service to operational ships through maintenance work on vessels base-ported at Portsmouth and to visiting ships. The work undertaken ranges from programmed dockings and essential defect work, which involves ships spending several weeks in dry dock, to minor engineering support. The FMRO plays an important role in allowing the crews of vessels based at Portsmouth to spend time with their families during those maintenance periods—something that would not be so easy to arrange were the work carried out elsewhere.

Mr. Peter Griffiths: I apologise to my hon. Friend for intervening. Can he assure me that the decision on the FMRO will be taken on its merits, not in the shadow of the problems at Devonport, which may be pushing the Ministry of Defence and the Minister towards a decision that they may not wish to take?

Mr. Soames: I am delighted that my hon. Friend made that intervention and I can assure him that what he suggests is not the case. The case for the operation is based solely on trying to obtain the best result. I endorse what my hon. Friend the Member for Portsmouth, South said about the importance of the harmony rules and how well they work for the 58 per cent. of the surface fleet based at Portsmouth. The rules are extremely important to the crews and those involved with them—they are allowed a degree of flexibility that other, less fortunate, people are unable to enjoy. The FMRO also provides a centre for supplying base services and utilities to the rest of the naval base, and I again join my hon. Friend in paying tribute to its admirable work.
The decision to market-test the FMRO was confirmed during the "Front Line First" study last year, and in July 1994 the formal preparations commenced. "Front Line First" confirmed that market testing was the best way of seeking efficiencies within the organisation, focusing resources on its key tasks and identifying alternative uses for any surplus infrastructure—for example, my hon. Friend mentioned more commercial utilisation of the docks. Nothing has occurred since that time to alter that judgment, and the current review will not go back to examine alternative management options, such as in-house operation or agency status. There is no basis to suggest that that would be worth while.
In the 18 months since the decision to market-test the FMRO was taken, we have seen the implementation of the "Front Line First" measures, several of which related specifically to naval infrastructure. There have also been developments in our drive to privatise the royal dockyards and in the associated programme of surface ship and submarine refits. All of those factors have implications for the future operation of the FMRO.
There has also been continuing pressure on the support area to generate the efficiencies that are needed to maintain front-line capability and to enable the MOD to live within

its means—which is not as easy as my hon. Friend might think. Therefore, it is only proper to review programmes such as the FMRO market test to confirm that, despite the changes that have taken place since they commenced, they remain the most appropriate and cost-effective solution. I make no apology for that, although I understand the concern that has arisen out of the uncertainty.
It is also correct for such a review to be conducted before third parties have committed significant resources to responding to the market test. That is why I have announced the review before issuing the invitation to tender: a stage which companies could reasonably assume marks the start of the formal market-test process.
It would certainly be wrong to encourage companies to invest resources at this stage while there remains a possibility of not proceeding with the market test. We would be rightly criticised if we were to do that. Therefore, we are now seeking to take a view on the Navy's future support requirements at Portsmouth and examine, against the background of our existing repair and maintenance facilities, whether we are better served by proceeding with the market test of the FMRO as it currently stands or whether alternative options would offer a more cost-effective, but still operationally acceptable, solution. Those alternatives would need to take account of the whole range of existing ship repair facilities, including the royal dockyards and the wider functions of Portsmouth naval base.
As to my hon. Friend's point about the dockyards' sale, the Government remain committed to privatisation at the right price. Considerable benefits and efficiencies have emerged in the years since the dockyards' management was contracted out to the private sector, and I fully expect that to continue under privatisation. We require both dockyards to provide longer-term competition and value for money within the refit programme. The FMRO does not carry out refit work. That may change if a private sector operator wished to bid for such work, but it would not alter our policy in respect of the two dockyards.
Efficiencies within the dockyards are not an alternative to efficiencies within the FMRO: both are needed. Dockyard efficiencies are already being addressed within the sale process. It is hoped that the review of the FMRO will generate its own savings. As I have said, any alternatives would need to take account of the whole range of existing ship repair facilities and existing capacity—including the royal dockyards and the wider functions of the Portsmouth naval base.
I assure my hon. Friend—who is entitled to such an assurance—that the FMRO will be examined not in isolation, but within a coherent context which embraces the naval base as a whole entity. Work is at an early stage and I can give no indication of how it might develop, but I am of course extremely conscious of the real anxiety caused to the work force and to the wider community and, as I told my hon. Friend, I do not wish to extend it one moment longer than absolutely necessary. I certainly hope to reach a decision early next year.
My hon. Friend wants to know what options we are examining. It will be clear from my general description of the factors involved in the review that one of the routes we are exploring is whether we can reduce the current overcapacity in our ship repair facilities. "Front Line First" made some inroads into the surplus capacity that exists within naval bases, but there is still some way to go to complete that process of rationalisation.
Ship repair facilities remain an area where some surplus capacity exists. That is being tackled within the Government's programme of dockyard privatisation and clearly must similarly inform the review of the FMRO market test. Therefore, I cannot rule out future reductions in the tasks carried out at the FMRO should their absorption elsewhere represent a more economical use of resources.
Equally however, it is pure speculation to claim that the FMRO will close as a result of the review. I can say categorically that we will not seek to introduce measures affecting the FMRO that would impact adversely on the operations of the front-line ships. My hon. Friend is fully aware—as am I—of the great benefits that the FMRO brings to that operation and that stands it in very good stead.
The whole point of the exercise is to avoid that outcome at all costs. I reassure my hon. Friend that the review will take account of the fleet's needs and those of the ships' crews as well as the demands of the Department as a whole. That is why I give an undertaking today that it will be examined in a coherent and sensible manner in the round rather than in isolation.
I should also stress that one wholly possible outcome is to continue with the market test. For that very reason, we have taken pains to maintain the process of preparing the invitation to tender in order to minimise any delay to the overall market-test timetable should the review confirm the validity of proceeding with it. I am satisfied that our dialogue with interested private sector companies will not suffer unduly during that period of uncertainty. They fully understand the pressures that have led to the situation.
I have heard claims that the review of the FMRO is designed to displace ship repair work from Portsmouth so that it can be given to the royal dockyards to bolster the Government's privatisation programme, as my hon. Friend suggests. I have also seen media speculation that the review now under way is part of a concerted effort to undermine the naval presence at Portsmouth. I would like to take this opportunity to dispel those rumours as totally unfounded.
Taking the claims in turn, the sale of the royal dockyards is proceeding as an entirely separate matter. Negotiations with the companies currently managing both yards are not assuming that any work whatsoever will transfer from the FMRO to either Rosyth or Devonport. It is equally absurd to conclude that the review of the FMRO heralds the beginning of the end for the naval

base. I recognise local concern about the recent decision which I announced during the defence debate last month to base HMS Ocean and the future amphibious ships at Devonport rather than at Portsmouth. However, I assure my hon. Friend that there is no connection between that decision and the review of the FMRO market test. The review has no remit to address current base-porting arrangements.
The fact is that Portsmouth is currently home to some 58 per cent. of the surface fleet of the Royal Navy—we need no further evidence of the Royal Navy's complete commitment to, and dependence on, Portsmouth as a key operational and support centre. I have also heard suggestions that, rather than review the FMRO, the Government should look again at the royal dockyards to seek efficiencies there. That task is already in hand within the context of the dockyard privatisation programme.
The Government's policy on ship refits is quite clear and requires both dockyards to provide effective competition and value for money into the future. The process of dockyard sale will prove to be the mechanism for delivering efficiencies within the dockyards and reducing costs to the MOD.
In summary, I make it clear that, in deciding whether to market-test the FMRO, we will take full account of the factors raised by both of my hon. Friends today. We will not adopt solutions which, while pleasing on cost grounds, fail to meet the operational needs of the Royal Navy. The FMRO currently delivers a first-class service in a thoroughly effective manner.
I cannot, however, dispel fears that the facilities and functions currently carried out by the FMRO might be affected by the review. I hope that, by setting them in the context of the financial and operational imperatives that obtain, I have at least allayed the worst suspicions and made it clear that our minds are truly and genuinely open.
There is certainly no hidden agenda or preconceived view that the market test should not proceed. As my hon. Friend rightly said, it behoves us to be prudent in committing the Department to courses of action which may not represent best value for money. That is the sole rationale behind the review.
I have listened carefully to my hon. Friend and undertake to keep him closely in touch with developments. Once again, I warmly congratulate him on securing a debate on an important asset not only to the Royal Navy, but clearly to Portsmouth and the wider community. I congratulate those who work in the FMRO. I am extremely grateful to them and I congratulate my hon. Friend on raising the matter.

Breast Cancer

Mr. Jeremy Corbyn: I am pleased to raise a subject that many Members are keen to debate—I took part in a similar debate earlier this year. An early-day motion tabled by a Liberal Democrat Member, which has all-party support, seeks compensation for women who suffer the terrible effects of radiotherapy damage and the permanent pain and injury that accompanies it.
On 15 February this year, a debate on breast cancer services was initiated by my hon. Friend the Member for Edinburgh, Leith (Mr. Chisholm). He informed the House about a petition of more than 200,000 signatures from Scotland alone about the need for better treatment. That debate referred to the work of the all-party group on breast cancer, which demonstrates that, unfortunately, one in 12 women in Britain are likely to suffer breast cancer and only 40 per cent. will be able to see a specialist oncologist.
Although today's debate deals with compensation, the wider issue of accessibility to quality diagnosis and treatment of breast cancer is particularly important. I quote from the reply to the debate on 15 February by the Under-Secretary of State for Health, the hon. Member for Bolton, West (Mr. Sackville), who, in reply to the hon. Member for Colchester, North (Mr. Jenkin), mentioned the
damage unwittingly done through the use of excessive radiation on treatment. I assure him that there are initiatives to minimise the risk of any further slip in quality assurance and plans are in hand to ensure that all radiation units are subject to the strictest guidelines so that the unnecessary and disastrous damage to which he referred cannot occur in future.
Later in his speech, he said:
It is well known that too many cancer sufferers, especially women with breast cancer, are not diagnosed swiftly enough. They are not seen sufficiently quickly by people with the appropriate level of expertise, which means that treatment can be delayed. Whatever the clinical effect of waiting for diagnosis and then waiting for treatment may be—it can be serious—the emotional effect is clearly considerable and we need to take action."—[Official Report, 15 February 1995; Vol. 254, c. 953–54.]
I assure the House that we shall return to that issue in future.
The figures relating to people suffering from breast cancer are truly horrendous: 25,000 cases per year are diagnosed and 15,000 die—or 300 deaths a week. Britain has one of the highest death rates in the world from breast cancer and one of the highest occurrences of that disease. The incidence rate is much lower in other countries. There many reasons for that and there is not sufficient time to discuss them today, but they need to be studied.
The treatment has been described as a lottery. I have been trying to raise this subject because of the serious problems faced by hundreds of women in Britain who suffer from permanent, progressive and disabling injuries after radiotherapy treatment for breast cancer.
The issue is not new. The Select Committee on Health examined it in detail in its report on breast cancer. I recommend that the Minister rereads the evidence taken on 30 March from Radiotherapy Action Group Exposure and the very thorough memo that RAGE drafted for the Select Committee on 15 January, setting out its aims and objectives and what it saw as the way forward.
Since its invention, the dangers of radiotherapy have been fully recorded and recognised, yet hundreds of women have been treated without informed consent or warning of its dangers. It is routinely prescribed, often without consultation and purely as a precautionary treatment. There is very little recognition in the medical profession of the true extent of the injuries caused by radiotherapy.
RAGE helped me a great deal in preparing the debate, and I pay the strongest possible tribute to that organisation for its work and for the hope that it has given many of its members and supporters round the country. It was formed in July 1991 and aims
To identify sufferers, collectively record their particular circumstances and draw attention widely to their injuries.
It lists as its objectives:
To seek independent inquiry. To seek remedial action, including compensation. To urge the upgrading of radiotherapy practice and seek national quality standards. To provide support.
It is doing that extremely well.
The work of RAGE took off as a result of the withdrawal at trial of Lady Ironside's High Court action for medical negligence. A handful of the victims met to discuss the situation and it immediately became apparent that there was a common pattern of injury among them. While RAGE cannot pretend to represent every woman who has ever had radiotherapy treatment or every sufferer from breast cancer, it certainly has a large membership and wide support, so it represents an authentic voice of people who are suffering because of such treatment.
There is something seriously and unaccountably wrong with the radiotherapy treatment techniques and procedures being applied in the United Kingdom. All the work of RAGE has been done by women in constant and dreadful nerve pain, whose personal and professional lives have been shattered. Some members of RAGE have had their limbs amputated and almost all have been left with only one usable arm. For the rest of their lives, in addition to being under the cloud of the possible recurrence of cancer, they will become progressively disabled.
I find it a humbling experience to talk to victims of breast cancer for whom, although their cancer has been treated, the permanent damage and injury and the constant pain means that they may never get a night's sleep or a day free from pain for the rest of their lives. As a man, I find their plight hard to contemplate. I am sure that many women will understand what I am saying and the requests that I am making today.
The Government should give urgent consideration to what is happening to those women and to giving them the compensation that they so desperately need and deserve. It is not just my view, but one shared by Professor Karol Sikora, professor of clinical oncology at Hammersmith hospital and a leading pioneer in the fight against breast cancer.
The members of RAGE have all contracted breast cancer and have experience of the treatment protocol and of receiving radiotherapy treatment of the brachialplexus at one of the 53 treatment centres in the United Kingdom, as it is invariably prescribed as a precautionary measure following surgery. While the women, as patients, were generally made aware of the temporary nature of the side effects such as sickness and nausea, they were not made aware of the risk of serious and permanent injury involving arm paralysis and other disabling consequential effects that have been identified.
The Department of Health should look seriously at the facilities that are made available to support people going through the treatment process. While consultants and doctors give medical advice and try to explain the possible effects, there is a need for women who are feeling desperately anxious and often isolated to receive that advice in a supportive environment. Unfortunately, that does not often happen. The debate earlier this year drew attention to the lack of specialist centres and the fact that many women are misdiagnosed because there is not sufficient expertise in all areas of the medical profession. The Minister conceded that point.
Some of the consequential effects are lymphoedema, lung burn leading to severe breathing difficulties, deadened bones—often leading to spontaneous fracture—heart damage, jaw bone pain, amputation of an arm as a last resort, skin burn and psoriasis. The onset of injury has occurred as long as 20 years after the treatment.
I hope that the Minister will listen to this carefully. It is important that the information collected by RAGE shows that there are clusters of cases at certain hospitals in certain years. In some hospitals, they coincided with a cost-cutting exercise to treat more women in the same time scale. Women were treated in 15 fractions instead of 25 to 30 fractions, thus enabling doctors to treat twice as many patients. Many RAGE members sustained injuries while being treated in 30 fractions. British hospitals use higher doses per fraction compared with other European countries and the USA. The records show a higher recovery rate, and that would be justified.
Britain's record of deaths from breast cancer is among the most horrifying in the world. In the United States, the issue has been taken seriously. A committee was already established, and President Clinton convened a special conference to examine the issue and the problems faced by women throughout the United States. We also must acknowledge the need for serious examination.
The marked clustering of injured women in certain hospitals in certain years—while other centres have experienced no cases—seems to suggest faulty protocols, inevitably at the cluster hospitals. Injury does not have to be inevitable. It is also worrying that the number of radiotherapy injuries after breast cancer reported to RAGE have increased, not declined, in recent years. The lack of a national reporting system makes it difficult to see the total picture. The Government have sought to dismiss the increase in notifications, claiming that it can be attributed to more women learning of the existence of RAGE. That may be so, but if there were national analysis and reporting, that argument would disappear. I ask the Minister to consider establishing such a system as a matter of urgency.
It is often said that it is difficult to identify causation, but that is not necessarily so. RAGE's work in increasing awareness of radiotherapy injuries has led to causation being unequivocally identified and admitted in the majority of cases. The Government's present position is that victims must seek compensation through the courts. Replying to Lorna Patch of RAGE on 7 August, the Minister stated, on compensation:
I can only repeat that the Government's position remains that the basis for seeking compensation is by proof of negligence through the courts.
That is unacceptable, because one must be very rich to pursue compensation that way. It costs around £200,000 to mount an effective case to prove medical negligence in

the High Court, which is totally beyond the means of almost everyone in this country. It would certainly be beyond the means of an individual who has suffered as a result of breast cancer, lost her income and, more importantly, forgone any prospect of future income. The individual might try to obtain legal aid, but there is a legal threshold of the probability of success and one must also pass a poverty threshold. The Government must instead produce a compensation package.
The injurious effects of altering the time dose fractionation plan were known to practitioners as early as 1966–29 years ago. The alteration continued at the Royal Marsden hospital until as late as 1982, 16 years after its injurious effects were first known, as a measure to increase productivity. RAGE members to whom I have spoken—and this comes through in all their documentation—had no prior warning before radiotherapy of the risk of permanent injury. As a result of such injury, entitlement to statutory benefits and state pensions has often been eroded, exacerbated by lack of Department of Social Security recognition of the type of injuries.
The compensation package suggested by RAGE—which I and a large number of hon. Members in all parts of the House endorse—is an annual figure for extra expenses, such as splints, slings, medication and hospital transportation; a sum to cover the net cost to date, net of any disability benefit or attendance allowance; and a payment to cover loss of earnings to date and to retirement. Victims can be women of all ages and classes. Many of them may have been in high-paid jobs, while others might have looked for career development and additional qualifications that would have improved their life style—and that potential has been cut by the inability to pursue their career.
Those calculations, however, take no account of the constant, nagging pain that victims suffer and their inability to lead a normal life and to pursue ordinary leisure pursuits. Where the loss of an arm is involved, the victim is unable even to pick up her child or grandchild—something that the rest of the population takes for granted as normal behaviour. Loss of mobility is an important factor.
The Department of Health is about to publish an audit conducted by the Royal College of Radiologists on the practices of its own members, to establish how such injuries occurred. RAGE was denied an independent, multidisciplinary inquiry. I hope that the audit will go some way to supporting the arguments constantly made on causation and for proper compensation. There is strong support for an independent inquiry that is not dominated by the medical profession, but takes evidence from its members—in the way that a Select Committee does.
We should be concerned to study the causes of breast cancer in Britain and why the incidence is so high, examine facilities for diagnoses and treatment, and look at increasing and making more readily available specialist treatment centres so that breast cancer can be detected earlier and be properly treated. We should ensure also that women who receive radiotherapy are made fully aware of what it involves, the dangers and possible side effects, which may not appear for many years.
We should also acknowledge the dreadful damage done to many women by mistakes, misdosage and a failure to explain possible after effects. The least we can do is to


ensure that women who have suffered so grievously in the past receive proper compensation, ensure that such suffering does not recur and try to conquer that awful illness.

The Parliamentary Under-Secretary of State for Health (Mr. Tom Sackville): I am grateful to the hon. Member for Islington, North (Mr. Corbyn) for bringing the issue to the attention of the House. I want to express my deepest sympathy to the women who have suffered side effects as a result of radiotherapy for breast cancer. I know that they can endure severe, debilitating pain and even bone fractures, as the hon. Gentleman said. In some cases, the injury to the arm is such that the women cannot continue their careers or undertake ordinary daily tasks without help. We must aim at discovering the reason for those strong reactions to treatment that, for most women, is effective and has few long-term side effects.
Radiotherapy dose and treatment techniques are determined by the clinician in charge. However, all patients have a right to consent to or reject treatment, and all are entitled to a clear explanation of any treatment proposed—including of any risks and alternatives. All treatments carry some risk, and patients must be allowed to decide whether they wish to continue with the treatment proposed. That important principle has been highlighted in the patients charter and it is departmental policy.
Any health professional will take any steps possible to avoid adverse effects, and significant cases are published so that all doctors may learn lessons from them. It is important to define factors that cause adverse effects in particular patients so that they may be avoided. It is possible that, in future, research will allow a patient's sensitivity to radiation to be assessed before treatment, to allow the treatment to be individually tailored. Unfortunately, adverse effects from radiotherapy are frequently incurable because the effect on the tissue cannot be reversed by surgery. The effects of radiotherapy are drastic because that is the nature of the treatment: it is designed to kill tumour cells and in doing so will kill a proportion of normal cells as well.
As the hon. Gentleman knows, representatives from RAGE Breast, the organisation representing many of the women suffering severe side effects, met Lady Cumberlege and the Department's chief medical officer last year to discuss the concerns of their members. Following the meeting, discussions took place between the Department of Health, the Royal College of Radiologists and RAGE at which it was agreed that the royal college would undertake a confidential clinical review of consenting RAGE members, funded by the Department of Health.
The aim of the review was to discover what common factors in treatment may have lead to these women suffering such effects. It is a relatively homogenous group and we hope that the audit will yield useful information about common factors in treatment that might have led to the adverse effects. Armed with this information, we can then assess the need for further studies.
Two hundred and forty-nine patients—all of whom are now members of RAGE—treated at 15 centres in the 14 years between 1980 and 1993 were invited to

participate; 126 consented to do so. A conservative estimate of the total number of patients receiving radiotherapy for breast cancer at these centres over the same period is 65,000. The clinical review has now been completed and the report will be published on 6 December. Following that, each participating RAGE member will receive a personalised assessment of his or her case.
At the behest of the Department of Health, the Royal College of Radiologists has developed guidelines for the care of women who have suffered tissue damage following radiotherapy for breast cancer. They were sent to the NHS in October this year. Additionally, the Department has funded the production of factsheets—prepared by the cancer charity BACUP and other charities—for women about to undergo radiotherapy, and for women experiencing short and long-term effects following it.
As for quality assurance systems, the ionising radiation regulations are intended to prevent unnecessary or excessive exposures to medical radiation. The Secretary of State's inspectorate investigates cases of suspected breach. There are four inspectors who are Department of Health officials. The introduction of dose-reducing strategies continues and is part of a thrust to reduce radiation doses to as low as reasonably practicable in order to achieve the required diagnostic or therapeutic purpose.
Guidance notes for the protection of persons against ionising radiations arising from medical or dental use were issued in 1988. In July 1991, guidance was issued to health authorities on quality assurance in radiotherapy. It sets out 18 requirements to be satisfied to ensure that quality is maintained. The guidance has been considered in two sites—the Bristol oncology centre and the Christie hospital in Manchester. Both centres completed their assessments, and their findings were disseminated by way of a document called "Quality Assurance in Radiotherapy", which I launched at a conference in May last year. The document will act as a quality assurance model for the wider NHS; it will be for each radiotherapy department to produce a quality manual showing how the requirements of the guidance are to be met and detailing procedures in the department.
I fully realise that many of the women suffering side effects would wish to have their injuries recognised and consideration given to their claims for compensation, commensurate with their injuries. It is important to be clear about how such claims are pursued. First, we believe it right that people harmed in the course of clinical treatment should be able to seek compensation through the usual legal process. But that does require them to demonstrate not only that they have been harmed but that there has been negligence, and that the negligence caused the harm. When negligence cannot be shown, there is no case in law for compensation.
From time to time it has been suggested that this is not right, and there have often been calls for the introduction of a system of no-fault compensation. Hon. Members will recall that this issue has been considered in the House before, most recently on Second Reading of the National Health Service (Compensation) Bill on 1 February 1991. On that occasion, as on every other when the issue has been raised, the House concurred with the view that a no-fault compensation scheme would not be helpful.
Perhaps I should remind the House of the reasons for that conclusion. We are sensitive to the fact that some of the victims of medical accidents oppose no-fault


compensation on the ground that it would make it less likely that plaintiffs' non-financial concerns would be addressed. Many plaintiffs argue that their motivation for pursuing a claim is not to secure money but to obtain an explanation and an apology and to ensure that what happened to them does not subsequently happen to others. Thus a system designed mainly to deal quickly with the financial aspects of medical accidents, without regard to fault, would deflect attention from plaintiffs' most important concerns.
Another issue is accountability. Our legal system holds all individuals accountable for their actions, which arguably has a deterrent effect on malpractice. No-fault compensation could remove or weaken it.
We must also be mindful of the possible cost implications of a no-fault compensation scheme. Costs falling on the NHS could increase greatly. For instance, a scheme in New Zealand which covers accidents generally is thought to cost at least 1.5 per cent. of its gross national product. Given that we spend about 6 per cent. of our GDP on health, hon. Members can imagine the possible impact on our health budget.
Proponents of no-fault compensation have yet to show why compensation in health care should be regarded as essentially different from negligence and compensation in other walks of life, where claims are resolved through the usual legal process.
Finally—

Mrs. Maria Fyfe: I am sorry that the Minister seems to be approaching the end of his speech because I had hoped to hear a quick word about the sums devoted to research into breast cancer, and the efforts to detect it in women under the age of 50. He probably knows that current mammography methods are not suitable for women under 50, who are clearly an important group.
The Minister has expressed his worries about NHS budgets. Clearly, if enough money were spent on research in the first place, fewer women would suffer from breast cancer.
Finally, it would seem from the Minister's argument that only women with money in the bank will be able to claim compensation at all.

Mr. Sackville: Although I have outlined some of the reasons why no-fault compensation has been thought inappropriate, we have recently accepted that a system should be tried for mediation in such cases. The Minister of State recently agreed to set up pilot mediation schemes that may make it easier to reach agreement. We have no wish gratuitously to defend certain cases or to cause any unnecessary delays.
The Calman review was set up precisely to ensure that best examples of cancer treatment in this country should be disseminated throughout the system. In particular, we should ensure that more patients see specialists and that those with rare or difficult-to-treat cancers do not always end up in local cancer departments. They should be referred to tertiary specialist cancer centres, possibly on a regional basis, so that people with the qualifications to treat cancer can diagnose and treat the more difficult cases referred to them.
Following the general agreement that we need to take such steps to improve cancer care, I hope to see more widespread best practice. I offer the House a commitment today on behalf of the NHS: we will do everything possible to ensure that accidents of this sort are avoided in the future.

It being Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Sitting suspended, pursuant to Standing Order No. 10 (Wednesday sittings), till half-past Two o'clock.

Oral Answers to Questions — SCOTLAND

European Community Directives

Mr. Steen: To ask the Secretary of State for Scotland how many statutory instruments have been passed through Parliament as a result of European Community directives in the past year. [771]

The Parliamentary Under-Secretary of State for Scotland (Mr. George Kynoch): There are 181, of which seven extend to Scotland only.

Mr. Steen: Is my hon. Friend aware of what is going on in his Department? Although I know that whatever he does, he does very well, the problem is that his civil servants have a penchant for gold-plating: whenever they see a directive, they have to add something to it. Directives arrive from Europe couched in very general terms, but then civil servants add to them. Will my hon. Friend tell us today that he will outlaw gold-plating, that any adding to European directives by his Department will be banned and that he will examine all the old directives that have been gold-plated and get rid of all the stuff that should not have been there in the first place?

Mr. Kynoch: My hon. Friend is absolutely right. Scottish Office officials are instructed to check that no double-banking or gold-plating takes place.

Mr. Canavan: Is the Minister aware of the concern about the implications of certain European Union decisions, including those contained in directives and certain decisions made by the European Court of Justice? What action do the Government intend to take in regard to the implications of the Bosman case, bearing in mind the fact that the abolition of transfer fees would threaten the financial viability of many Scottish football clubs?

Mr. Kynoch: I am informed by my hon. Friend the Minister with responsibility for sport that the Scottish Football Association is scheduled to hold a meeting with him on that very issue.

Mr. Gallie: My hon. Friend will be aware of the bathing water standards that operate as a consequence of a European directive, but is he aware of the time that it has taken Strathclyde region to bring bathing water standards in my constituency up to scratch? The authority has procrastinated rather than providing. There is, however, a glimmer of hope: the new West of Scotland water and sewerage authority looks set to find a solution. Does my hon. Friend welcome that?

Mr. Kynoch: Of course I do. My hon. Friend is right to draw attention to the deficiencies of Strathclyde regional council—not just in connection with bathing water. This year it has already been very slow to react to floods with prevention measures. I am afraid that the council has let down its electors, and I look forward to seeing the new water authority doing just what my hon. Friend describes.

Scottish Council (Development and Industry)

Mr. Salmond: To ask the Secretary of State for Scotland when he last met representatives of the Scottish Council (Development and Industry) to discuss economic matters; and if he will make a statement. [772]

The Secretary of State for Scotland (Mr. Michael Forsyth): I met them on 6 September. Scotland's economy is buzzing with success.

Mr. Salmond: When the Secretary of State next buzzes along to the Scottish Council—many of whose members seem to be deserting the Unionist cause, perhaps agreeing with the Prime Minister that independence is perfectly feasible—will he discuss with its members the results of a survey that appeared in The Times last Monday? It revealed that, apart from punishing low earners, 21 Tory tax rises since the last election had cost average earners £1,000 each.
To avoid any suggestion of who is responsible for that, and before disparaging the policies of Opposition parties, will the Secretary of State tell us how many of those 21 Tory tax rises he has personally voted for over the past three years?

Mr. Forsyth: On the subject of surveys, the hon. Gentleman will have seen the survey by Scottish chambers of commerce showing that 0 per cent. of businesses connected with the oil industry, which he is so keen to talk about, support his party's policy on independence. As for tax rises, the hon. Gentleman supports a tartan tax for Scotland—a tax on people working in Scotland—so he has a brass neck to talk to us about tax cuts. The only party in the House that is in favour of lower taxation, and delivers it, is the Conservative party.

Sir Hector Monro: Does my right hon. Friend remember the warm welcome and endorsement by all the Opposition parties of the Fraser of Allander report? Yet now that we have seen the report we know that only 14 per cent. of industry in Scotland would put up with the tartan tax. Are not all the Opposition's policies therefore in disarray?

Mr. Forsyth: I entirely agree with my right hon. Friend. Indeed, I was much struck by the fact that before they had seen the survey, the leaders of the Opposition parties commended it and said how splendid it was, but that when they saw that only 14 per cent. of respondents would support a tax-raising Scottish Assembly, they started saying that they were rather concerned about the low response rate. The fact is that the businesses that responded spoke for Scotland, and it is high time that Opposition Members listened to the voices of those on whom Scotland's jobs depend.

Mr. Wallace: I am sure that the Secretary of State and others will wish to express their congratulations on the successful creation of 3,500 jobs at Moss End through inward investment from Taiwan. Although it is estimated that those jobs will each produce 1.5 more jobs in the Scottish economy, does the right hon. Gentleman accept the figures given to several hon. Members at the Highland Park Parliamentarian of the Year lunch, which showed that for every job lost in the whisky industry in Scotland—sadly, many jobs have been lost in recent times—3.5 more jobs are lost as a result? Bearing that


fact in mind, what representations has the right hon. Gentleman made to the Chancellor of the Exchequer to reverse the real tartan tax of last year—the additional 26p on a bottle of whisky?

Mr. Forsyth: I am grateful to the hon. Gentleman for drawing attention to the splendid success by Locate in Scotland in attracting new inward investment to Lanarkshire, and a stake in the new industrial revolution. It is a pity that he did not go one stage further and abandon the tartan tax, which would send elsewhere the inward investment on which we depend. As for whisky taxation, the hon. Gentleman should not tempt me to say things that I should not say, but I have made my right hon. and learned Friend the Chancellor of the Exchequer well aware of the concerns of the whisky industry. If the hon. Gentleman and his colleagues would stop calling for extra expenditure, they might have a little more credibility when they call for less taxation.

Mr. Bill Walker: When my right hon. Friend meets the august body mentioned in the question to discuss the economy, will he remind its representatives that the estimates clearly demonstrate that Scotland, excluding the oil industry, would have an £8.1 billion deficit? Will he also tell them how Scotland benefits enormously from being part of the United Kingdom, because this Parliament has always taken that fact on board? That is why the Scots are so prosperous today.

Mr. Forsyth: I agree that Scotland benefits from the Union. England, too, benefits from the fact that Scotland is part of the Union. My hon. Friend is right to draw attention to the fact that if the nationalists had their way we should have to fund a structural deficit of about 15 per cent., or £8.1 billion—that is an independent figure. The deficit could be funded only by higher taxation—including taxation on whisky—by higher borrowing or by higher inflation, and I suspect that all three would be used. Most people want nothing whatever to do with such an assault on our standards of living, or with the destruction of our vital public services, which would be the consequence of going down the independence road.

Mr. George Robertson: Will the Secretary of State accept from me the fact that when he meets the Scottish Council (Development and Industry) it will certainly not accept his propagandist interpretation of the survey by Scottish chambers of commerce? Despite a sustained campaign of smears, distortions, accusations and downright lies about devolution, there has been a decisive swing in the Scottish business community towards the idea of a devolved Scottish Parliament. Will the right hon. Gentleman not accept that fact now? Whereas 67 per cent. of the business community supported the status quo in 1991—the Secretary of State still does—88 per cent. of those who responded to the poll were against the status quo, with only 9 per cent. on the right hon. Gentleman's side. When will he recognise that he is wrong and that business opinion now realises that devolution will be good for Scotland, for Britain and for Scottish business? Will he change his mind before it is too late?

Mr. Forsyth: The hon. Gentleman is beginning to sound rattled. He claims that his position has been distorted, but when he was invited to speak for himself on "On the Record", he spent 20 minutes failing to answer

the West Lothian question, which his hon. Friend the Member for Linlithgow (Mr. Dalyell) asked all those years ago.

Public Expenditure

Mr. Harry Greenway: To ask the Secretary of State for Scotland how much public money per capita is spent on grants and all other public expenditures in Scotland; what is the percentage difference between these figures and those for Northern Ireland, Wales and England; and if he will make a statement. [773]

Mr. Michael Forsyth: The answer is £4,185, 12 per cent. less, 7 per cent. more and 21 per cent. more respectively. Scotland gets a good deal from the Union.

Mr. Greenway: Does my right hon. Friend agree that it is remarkable that Scotland does so much better on public funding than England and Wales? Is it not naive of the Labour and Liberal parties to expect that high funding to continue, to expect to be allowed tax-lowering and tax-raising powers and to expect Englishmen and Welshmen to pay for that?

Mr. Forsyth: I agree with my hon. Friend—as the public expenditure round has been completed, it is safe for me to do so. I am not sure whether many people down here realise that Opposition Members are going around Scotland arguing that Members of a Westminster Parliament would vote for more money for a Scottish Parliament than they would vote for their own constituencies, and that a Scottish Parliament could use its powers under a tartan tax to lower taxation to less than in England. It is simply not credible, and it provides no basis on which to have a stable relationship within the Union. It is laughable in terms of its prospects, and it would be deeply damaging to Scotland's economic interests and public services.

Dr. Godman: What about the illegal acquisition of grants? Will the Secretary of State confirm that the £600,000 paid to Tate and Lyle in regional selective assistance grants was obtained illegally under European Union law? Was it a case of collusion by Scottish Office officials in these transactions, or—more probably—were they acting in a state of what might be called justifiable ignorance? What is the right hon. Gentleman doing to ensure that the money is repaid to the Treasury or, better still, given to Inverclyde district council, which will have to pick up the pieces?

Mr. Forsyth: If the hon. Gentleman has a complaint to make about regional selective assistance and how it is paid, there is a proper way to make it: he should write to me, and I shall certainly look into any complaint. He will know that we have been able to provide substantial regional selective assistance, which is one of the reasons why 3,300 new jobs are being created in Lanarkshire and why two major job-creation prospects have emerged in Scotland in recent days. He will know that we can try to replace the jobs that, sadly, were lost at Tate and Lyle in Greenock by attracting more inward investment. I hope that he will distance himself from his party's adherence to a tartan tax, which would destroy jobs and scare away inward investment.

Mr. Jenkin: Does my right hon. Friend recall Bob Boothby's maxim:
Without Scotland, England is sunk"?


Will he take it from me that the extra money that English Members of Parliament commit to the Scottish economy is money extremely well spent and is a price well worth paying to maintain Scotland's prosperity within a single United Kingdom currency?

Mr. Forsyth: I agree. We are one United Kingdom, but Opposition Members wish to disturb that relationship—and in a way that would be to Scotland's disadvantage.

Forth Bridge

Mr. Darling: To ask the Secretary of State for Scotland when he expects to announce the date and terms of reference of the inquiry into the second Forth road bridge crossing at Queensferry. [774]

The Minister of State, Scottish Office (Lord James Douglas-Hamilton): My right hon. Friend and I recently met Councillors Eric Milligan and Robert Gough and other representatives from Fife and Lothian regional councils. We agreed to examine together proposals for traffic management on and around the Forth road bridge. Once these discussions have concluded, we shall be in a position to announce our proposals.

Mr. Darling: Do the Government still want to proceed with the building of a second Forth road bridge, which would devastate the constituency that the Minister seeks to represent at the next election? Have the Government changed their tack? Do they now accept that there needs to be a co-ordinated public transport strategy to deal with the transport needs of Edinburgh and south-east Scotland? Will the Minister make the Government's position clear so that we know whether they want to build this ridiculous bridge?

Lord James Douglas-Hamilton: I can say quite clearly that we are in favour of a medium-term strategy. We have discussed that very fully with Councillor Eric Milligan. I strongly recommend that the hon. Gentleman has discussions with him, because we have reached an agreement on the subjects on which we can go forward with consensus. The subjects cover many issues, such as the new Halbeath bridge junctions in Fife and improvements to the railways. Various electronic tolling measures have also been considered. I am pleased to see that Fife and Lothian share our view and that they will work together on this. We cannot rule out the important role that a new bridge might play in the longer term, but it is premature to proceed further at this stage.

Mr. Menzies Campbell: If there is a public inquiry into a second Forth road bridge, will the inquiry's reporter be entitled to look at Government policy and, in particular, to consider the comparative advantages of road transport or a much better system of public transport?

Lord James Douglas-Hamilton: I have already said that we are going ahead with a medium-term strategy, which includes very substantial improvements to public transport strategy, such as park-and-ride schemes and bus lanes. It would be premature to hold a public local inquiry; many measures must be put in place by agreement. We are not going to forget the interests of those who live in Fife and in the north of Scotland.

Munitions Dumping (South-west Scotland)

Ms Roseanna Cunningham: To ask the Secretary of State for Scotland what was the Scottish Office response to environmental concerns arising from munitions dumping in the south-west of Scotland; and if he will make a statement. [775]

The Parliamentary Under-Secretary of State for Scotland (Mr. Raymond S. Robertson): The Scottish Office contributed fully to the emergency services' excellent response in dealing with the phosphorous devices. It has provided data on materials deposited under licence in the Irish sea and recently brought forward its planned marine survey of the Beaufort's dyke area.

Ms Cunningham: As the Ministry of Defence has admitted that many of the relevant munitions dumping records have been destroyed, does the Minister agree that it is enormously important to know that there is at least one individual—former Army Captain Buchan of Peterhead—who was directly involved in the dumping in the 1940s? Will he outline what arrangements the Scottish Office is making to interview Mr. Buchan to establish the extent of his direct information and to establish whether there are others in his position? If such arrangements are not being made, will he explain why not?

Mr. Robertson: It is unfortunate for the hon. Lady's understanding of the issue that neither she nor any of her hon. Friends were present in the Chamber when we last debated this issue last Wednesday. The Ministry of Defence's advice is that any munitions on the sea bed are potentially dangerous and should be left undisturbed. It will be for the relevant Government Departments to consider the appropriate action if the survey detects significant quantities of munitions outwith the designated dump site. I am sure that the hon. Lady will be the first to agree that we should wait until we have the results of the survey that is being undertaken before we reach any conclusions and before any Department decides what it should do.

Mr. Donohoe: The Minister may be aware that a public inquiry has been held on the overland route of the electrical interconnector in Scotland and Northern Ireland. What has not been covered by any public inquiry is its route under the sea. Given the latest concerns in relation to the laying of British Gas's pipeline, does the Minister think that it is now time for a public inquiry about its route under the sea?

Mr. Robertson: There is no hard evidence to substantiate any of the claims that the laying of the gas pipeline was responsible for the devices arriving on the beach: there is circumstantial evidence, but no hard evidence. We must wait until we have the results of the survey that is being undertaken. We have said—and I repeat to the House—that the results of the survey will be published in full when we have them.

Mrs. Ray Michie: In that connection, which Department will be responsible if compensation has to be paid to somebody who was injured by one of the phosphorous devices that washed up on the beaches around the west coast of Scotland? Would it be the Scottish Office, the Department of Trade and Industry, the Ministry of Defence or, indeed, British Gas?

Mr. Robertson: I know that the hon. Lady has pursued the issue with great vigilance because one of her


constituents has been injured—the only person to be injured. I understand from the Department and others that he is making good progress and we wish him well. Compensation is still being discussed and once it has been finalised I shall write to her.

Mr. Beggs: The Minister will be aware that phosphorous incendiary devices have also been washed up on the east and north Antrim coast. May I have an assurance that the survey will be thorough and that it will examine the sea bed between the south-west Scottish coast and the east coast of Northern Ireland to protect the workers to whom the hon. Member for Cunninghame, South (Mr. Donohoe) referred, who are involved in laying the gas pipeline and who, I hope, will be involved with the interconnector when a favourable decision is made?

Mr. Robertson: I assure the hon. Gentleman that site scar sonar and other underwater television studies are being undertaken. Sea bed sediment samples will be taken by grab-sampling equipment. The Department will be fully involved with the other relevant Departments once the results of the survey are known.

Mrs. Liddell: As the Prime Minister has now acknowledged that the Government have got it wrong about the government of Scotland and are out of touch with Scottish public opinion, will Ministers recant the bluff and evasion that we have had on munitions dumping, and which we just heard from the Dispatch Box, and extend the technical capability of the survey and the areas to be covered by it to include all those where such dumping has taken place? May we also have an exact answer as to what the Government intend to do to protect public safety?

Mr. Robertson: I welcome the hon. Lady to the Dispatch Box: like me, she is a new kid on the block. I will write to her and answer her questions, if she can satisfy me about what she means by bluff and evasion. There has been no bluff, and no evasion.

Wealth Creation

Lady Olga Maitland: To ask the Secretary of State for Scotland if he will make a statement on wealth creation in Scotland. [777]

Mr. Kynoch: The process of wealth creation in Scotland would be severely damaged by the constitutional changes advocated by Opposition Members.

Lady Olga Maitland: I thank my hon. Friend for his reply. Is he aware that the Scottish chamber of commerce has found that 70 per cent. of Scottish businesses are bitterly hostile to the idea of a Parliament with tax-raising powers? They know very well that that would be the death knell for Scottish investment from outside. Indeed, it would kill all the work of the past five years, when £3 billion has been invested in Scotland, creating 47,000 jobs. Is he aware that those jobs would simply head down south, which would put thousands on the dole?

Mr. Kynoch: My hon. Friend is absolutely right and I wish that the hon. Member for Hamilton (Mr. Robertson), instead of talking to one of his colleagues on the Opposition Front Bench, would listen and realise that
70 per cent. of Scottish businesses have said that his tartan tax-raising Scottish Parliament is bad for them, the people of Scotland and the economy of Scotland.

Sir Russell Johnston: Is the Minister aware that both he and his right hon. Friend the Secretary of State going on and on in a mindless way about a tartan tax, which is no more than a superficial, meaningless soundbite, should consider federal systems throughout the world, such as those in Germany, the United States and Canada, where it is possible for federal units to raise taxation and thereby stimulate wealth creation?

Mr. Kynoch: Perhaps the hon. Gentleman should talk to his Liberal Democrat colleagues because that is not what his party advocates. It is advocating a tax-raising Parliament for Scotland. It is clear to everyone who looks at the figures on funding in Scotland that that will be bad for Scotland. Seventy per cent. of businesses in the Fraser of Allander report confirmed that it would be bad for business in Scotland.

Mr. Stephen: Does my hon. Friend accept that people who have a job in Scotland and elsewhere in the kingdom are working harder and for longer hours than ever before and that their employers would like to take on more staff but are afraid to do so because, if they prove unsatisfactory, they might not be able to get rid of them? They are afraid that they might be taken to the cleaners under so-called employment protection legislation.

Mr. Kynoch: My hon. Friend refers to employment practices. What is clear to the people of Scotland, and to employers in Scotland, is that the policies advocated by the Labour party—the social chapter and a national minimum wage—are, along with the tartan tax-raising Parliament, very bad news for the Scottish economy and bad news for business.

Mr. Maxton: Instead of continuing to mouth his closed-mind attitude to devolution, why does not the Minister—and the Secretary of State—take a little time to study what has happened in the autonomous regions of Spain, in particular, which is much more like what is being proposed in Scotland? Catalonia, the Basque country and Galicia have all shown an improvement in their economic structures as a result of devolution and have not been damaged.

Mr. Kynoch: I wish that the hon. Member would look at all the positive things that are happening in Scotland: the fact that unemployment is falling steadily—whereas in Spain I understand that it is at record levels—and that business is performing better than ever before, with record output and exports. None of this would be possible if businesses were not competitive. The hon. Gentleman should look at the success stories in Scotland and question why he wants to make it very difficult for business to continue succeeding in Scotland.

Mr. Gallie: Has not the principle of level taxation across the United Kingdom given Scotland the opportunity to create the levels of wealth of recent times? Will that not be put in jeopardy—and the Union too—if we impose a tax on Scottish people which is not imposed across the Union as a whole?

Mr. Kynoch: My hon. Friend is absolutely right. I am sure that nobody in Scotland wants to pay more tax than the rest of the United Kingdom. We have been discussing


record inward investment and the successes of last week. I question whether we would have been able to convince those companies that they should locate in Scotland if it was taxed higher than elsewhere in the United Kingdom. Quite blatantly, the Opposition parties cannot see how their tax-raising Parliament will square the books unless they either reduce services or increase taxes, and that would be bad for the people of Scotland.

Mr. McFall: The Minister knows that the 21 Tory taxes since 1992 are the equivalent of one every seven weeks in Scotland. Can he look in the eye the 200,000 unemployed and 50,000 young people who do not have a future and tell them that they are participating in wealth creation? Like the Prime Minister and the Secretary of State for Scotland, is he not wrong on devolution, culpable on the poll tax, which wasted £2 billion, and part of a Government who have deeply scarred the Scottish economy and Scottish society? Does he not accept that the majority of Scots believe that the Government's lies on taxation render them unfit for office?

Mr. Kynoch: I hope that the hon. Gentleman will look the people of Scotland straight in the eye and explain to them how, if he were ever to get in a position of having his tax-raising Parliament, he would justify the loss of jobs, not just from the tax-raising Parliament but from signing up to the social chapter and the national minimum wage, even though he and his party are scared to tell the people what national minimum wage he proposes. I suggest that he is scared because he knows that it will cost jobs—and dearly.

Inward Investment

Mr. John Marshall: To ask the Secretary of State for Scotland if he will make a statement on inward investment in Scotland. [779]

Mr. Michael Forsyth: Scotland is enjoying record levels of inward investment.

Mr. Marshall: I congratulate my right hon. Friend on the announcement of an additional 3,300 jobs in Lanarkshire and on the fact that Scotland has more success in attracting inward investment than any other country in western Europe. Does he believe that that success would continue if Scotland adopted a tartan tax, a national minimum wage and the social chapter and were as well run as the district of Monklands?

Mr. Forsyth: No, I do not.

Dr. Reid: Since everyone else has raised it, may I also say to the Secretary of State and Ministers that I am very pleased about the inward investment from Chunghwa Picture Tubes. The Minister will know that it has been a team effort running from the local development agency in Lanarkshire and local councils up to the Scottish Office. It would be churlish of me, having criticised Ministers in the past, not to give them full credit for the efforts that they have made—particularly the Minister of State—to keep me informed, and I therefore congratulate them.
Will the Secretary of State accept that, although I say that without qualification, he must realise that a hard-headed, realistic and progressive company such as Chunghwa came here in full knowledge of all the circumstances? It cannot but have contemplated the onset

of a Labour Government. If anything, its coming here proves that the scare stories about Labour Governments and tartan taxes hold no water.

Mr. Forsyth: I am grateful to the hon. Gentleman for his generous remarks and for promoting my hon. Friend the Member for Kincardine and Deeside (Mr. Kynoch) from Under-Secretary of State to Minister of State. I am sure that my right hon. Friend the Prime Minister will take account of that recommendation, given the splendid job that my hon. Friend did in attracting Chunghwa to Scotland.
The hon. Gentleman is a fair-minded man. I should like him to use his imagination—to imagine, for a moment, a Labour Government and to imagine, for a moment, that the negotiations were going on under such a Government. Exactly what argument would he use to attract Chunghwa to Lanarkshire when the Secretary of State for Wales pointed out that if the company were to go to Wales, it would not have to pay a tartan tax? It would be a knock-out blow. In this case, it was pretty tight between us and Wales, and we won because of the conditions that we had created in Scotland. If the hon. Gentleman's party had its way, Scotland would be disadvantaged.

Mr. Kirkwood: Will the Secretary of State accept that there are real difficulties for companies that are expanding in areas of Scotland that do not have any development assistance, and that they can be enticed outward, for disinvestment purposes, to other parts of the United Kingdom? Will he make it his business to ensure that local enterprise companies and local authorities have the wherewithal to try to get sensible arrangements in place to prevent that disinvestment?

Mr. Forsyth: I agree with the hon. Gentleman. Indeed, I have spoken to Scottish Enterprise about the matter in the context of the borders where there is a need for us to see what we can do to generate more investment opportunities and to create more employment, especially in respect of the difficult position of textiles. I took the opportunity of a meeting, last week I think, with the Commissioner to discuss some of those points. I can assure the hon. Gentleman that I am very aware of the concern in the borders. I have asked Scottish Enterprise to discuss with the local enterprise company what more can be done to take advantage of the tremendous opportunities in the borders, of the wonderful quality of the labour force and of the environment on offer there for those who wish to invest in Scotland.

Sir Hector Monro: Does my right hon. Friend agree that, with two notable exceptions, it seems impossible to get Opposition Members to understand the successes of Locate in Scotland during the past five years? Can my right hon. Friend spell out a little more detail about the 47,000 jobs and the 379 projects that have been created? Can he show that the trend of unemployment in Scotland has been markedly downward and is likely to continue in that direction?

Mr. Forsyth: I would be happy to arrange for all the successes to be printed in the Official Report if my right hon. Friend would provide a question that would give me such an opportunity. I will not list the successes this afternoon in view of your strictures, Madam Speaker, to keep answers as short as possible.
Suffice it to say that none of the successes has happened by magic. They have happened because we have created flexible labour markets and low taxation and


improved standards of education. All those policy achievements are important in creating jobs. If Opposition Members examine their consciences, they will find that they were on the wrong side of the argument when we made changes in our economy and in our policy.

Housing

Mr. Chisholm: To ask the Secretary of State for Scotland what percentage of Scottish Office expenditure was devoted to housing in (a) 1978–79 and (b) 1995–96. [780]

Mr. Raymond S. Robertson: The figures are 15.8 per cent. and 4.3 per cent. respectively.

Mr. Chisholm: Now that the Government have admitted that they were wrong about the government of Scotland, will they also admit that they have been wrong to cut housing expenditure year after year and to allow councils to spend less and less on house building and modernisation? Does the Minister realise that with existing resources, it will take 20 years for Edinburgh district council to complete its window replacement programme and that thousands of homes also require central heating and other improvements? Will he think of those in cold homes and those in no homes when he makes his housing decisions? Will he also lobby the Chancellor of the Exchequer for an expansion of the home energy efficiency scheme in the Budget next week so that more job-creating insulation work can be carried out?

Mr. Robertson: The comparison that the hon. Gentleman asked for is as misleading as it is useless. Transfers of responsibility from other Whitehall Departments to the Scottish Office have significantly increased the overall size of the Scotland programme since 1978–79. As the hon. Gentleman should know, housing subsidies are now paid through the housing benefit system and 300,000 public sector houses have been sold. Both of those factors substantially affect the share of expenditure attributable to housing. The hon. Gentleman would not expect me to say anything ahead of next week's Budget.

Mr. Matthew Banks: Given the fact that public expenditure per head of population in Scotland is 14 per cent. higher than the United Kingdom average, can my hon. Friend reaffirm his commitment to the housing sector in Scotland? Does he agree that it is vital that we continue to encourage the private rented sector, in particular housing associations, to provide high-quality, affordable housing to those in greatest need?

Mr. Robertson: My hon. Friend is absolutely right to draw attention to the level of investment in housing, despite the fact that, since 1978–79, as I said, 300,000 public sector houses have been sold. Despite that, the allocation per house issued to local authorities for 1995–96 was higher in real terms than the equivalent figure for 1978–79. That comparison would have been better than the one about which the hon. Member for Edinburgh, Leith (Mr. Chisholm) first asked.

Mr. Ingram: The Minister is aware of the problem affecting 264 of my constituents in East Kilbride with the identification of asbestos in houses built by the development corporation. What additional help will the 239912 L

Minister give to local authority or other housing agencies in East Kilbride to remove that major danger to the health of the community?

Mr. Robertson: I am disappointed and surprised at hon. Gentleman because he has pursued this with me, and I have offered to meet with him and a delegation. I believe that that is a better way to pursue the issue than shouting at each other across the Floor.

Mr. Welsh: Has the Minister had an opportunity to read the homeless persons charter for Scotland which outlines the desperate plight facing tens of thousands of homeless persons in our country? Applications from the homeless have risen by 175 per cent.—from 15,000 to 43,000—during the past 10 years. Why are the Government cutting the finance for housing provision in Scotland? When the need is great, the Government simply say no.

Mr. Robertson: Like the hon. Gentleman, I welcome the publication of the charter as an expression of homeless persons' views. We recognise the need to take account of the views of the users of the homelessness service, not just the providers. I have a copy of the charter and I will study carefully the recommendations that particularly refer to the Scottish Office.

The Union

Mr. Jacques Arnold: To ask the Secretary of State for Scotland if he will give his current assessment of the state of the Union. [781]

Mr. Michael Forsyth: The Union guarantees prosperity and stability. A tax-raising Parliament threatens that stability and would penalise people for working in Scotland.

Mr. Arnold: English Members are proud to share the United Kingdom with Scotland. We have heard much today about the impact on Scottish business of a tartan tax. What would be the impact of an assembly with legislative powers, producing red tape and all kinds of controls? How would that assembly limit the ability of Scottish business to compete and to attract the investment that it has secured so well under the Government?

Mr. Forsyth: The impact would be devastating. The Opposition complained when the poll tax was introduced into Scotland one year ahead of England. They are proposing a tartan tax that would be paid in Scotland year after year, destroying jobs and opportunities. It is a wicked proposal that would damage Scotland's interests. The sooner the Opposition abandon it, the better.
The hon. Member for Dunfermline, East (Mr. Brown) goes round boasting that he would reduce the first band of tax to 10p in the pound. Are we to assume that in Scotland it would be 13p in the pound—or will the tartan tax be levied only on people on middle incomes while the poorest and the richest escape it? It is time that we heard from Opposition Members how it will work.

Mr. Norman Hogg: Does the Secretary of State accept that some—I believe many—Opposition Members work for the strengthening and maintenance of the Union? Does he also accept that one way of strengthening and maintaining the Union is to have regard to public opinion in Scotland and the wishes of the people? is he aware that


the wishes of the people of Scotland are that we should have a Parliament in Scotland, and that his proposals, which he will present on 30 November, for a tarted-up Scottish Grand Committee fall far short of what the people of Scotland require?

Mr. Forsyth: I am surprised at the hon. Gentleman. He is usually fair minded, and I should have expected him to have waited to read our proposals before judging them as inadequate. I happen to know that the hon. Gentleman is indeed a good Unionist, and he must find it very hard to go along with all that constitutional convention nonsense. He cannot even keep a straight face, Madam Speaker. In his heart of hearts, he knows that it will damage the Union.
If the hon. Gentleman is able to use his influence with the Labour Front-Bench spokesmen to persuade them to abandon those ridiculous proposals, there will be three cheers on the Conservative Benches and three cheers the length and breadth of Scotland when people discover what those proposals would really mean.

Mr. Bill Walker: Does my right hon. Friend believe that the Union would be strengthened and enhanced if all the key and important ministerial portfolios—including that of the Chief Whip—were in the hands of Scottish-based Members of Parliament? If a Parliament were proposed for Edinburgh, if a tartan tax existed and if the West Lothian question had not been tackled, does he believe that the Union would be enhanced or placed at great risk?

Mr. Forsyth: I believe that it would damage the Union, lead to the break-up of the United Kingdom and damage Scotland's ability to argue for a good deal at Westminster.
The office of Secretary of State for Scotland is a powerful one. The hon. Member for Hamilton (Mr. Robertson) aspires to hold it. I am sure that, if ever that day were to arrive, he would use the office to great effect. That powerful office would be lost if Opposition Members had their way. Opposition Members are sent to the House to represent the interests of their constituents. Were there a Scottish Parliament, they would have no involvement in the matters that are of most interest to their constituents at home in Scotland.

Sir David Steel: Why are Ministers so reluctant to make comparisons with other people's unions? Has the Secretary of State noticed that this weekend, Mr. Pujol and his party won their third successive election victory in Catalonia without talk of slippery slopes, flamenco taxes or separating Barcelona from Madrid? Will the Minister please explain why what is possible and welcome in Spain is impossible in the United Kingdom?

Mr. Forsyth: I am sure that, if the right hon. Gentleman had his way, we could replicate what they have done in Spain—increase youth unemployment to 25 per cent. While he is doing his tour of foreign examples, he might consider Canada, where the argument was that, by choosing devolution, they would prevent separatism. That has ended in division and disruption, with a marginal result, and the separatists continue to ask for more. The lesson of Canada is, "If you feed the crocodile, one day you get eaten."

Mr. George Robertson: Does the Secretary of State agree that when the Prime Minister, no less, said last week

that he could understand very clearly why the Scots feel that Westminster is a long way off and that no one has any interest in them, and that that was very unattractive, that statement and that interview represented a major and significant U-turn on a 16-year-old policy by the Government of no change being required in the constitution, and was a humiliating admission of failure by the Government on those issues? Some 87 per cent. of Scots oppose the Government. What sort of special tartan Tory arrogance is it for them to say that the Scots will swallow the idea of some tinkering to the package of indifferent reforms? Does the Secretary of State realise that he and the Government are the biggest threat to the country's unity?

Mr. Forsyth: The hon. Gentleman should learn from his experience of the chambers of commerce survey that it is wise to wait and see what is said before rubbishing or welcoming it.
We stand on our record of giving Scotland more say over its affairs. We set up the Scottish Office and have progressively given it more and more administrative power. As my right hon. Friend the Prime Minister has made clear, we are prepared to look at ways of improving the government of Scotland.
When we produce our proposals, the hon. Gentleman will doubtless say that they are inadequate, but they will have been thought through and they will work. We will not be in the position of the hon. Gentleman, who had to describe the West Lothian question as an anomaly, nor shall we be in the position of the Leader of the Opposition, who had to describe the funding of Scotland as an accountancy detail. It is the hon. Gentleman who puts party advantage before his patriotic duty to Scotland and the interests of his party before the Union. The Government will never do that.

Lockerbie

Mr. Dalyell: To ask the Secretary of State for Scotland what action he has taken following the meeting on 8 November in the Crown Office between the Lord Advocate, the Solicitor-General and the hon. Member for Linlithgow in respect of Her Majesty's Government's response to the offer of the Government of Libya to hold a trial of two Libyan nationals accused of responsibility of bombing Pan Am 103 over Lockerbie under a Scottish judge and Scottish rules of evidence. [782]

Lord James Douglas-Hamilton: When my noble and learned Friend the Lord Advocate recently met the hon. Member, he reminded him that the position of Her Majesty's Government is that the accused should be tried before the ordinary courts having jurisdiction. The demand that the accused should be made available for trial in Scotland or the United States has been endorsed by the United Nations Security Council. Libya has previously received detailed advances from us on the fair trial and treatment of the accused and has accepted that they will get a fair trial in Scotland. There is no reason why Libya cannot now make them available for trial in Scotland.

Mr. Dalyell: Can we be sure that certain Ministers want the truth about Lockerbie?

Lord James Douglas-Hamilton: Yes.

Kincardine Bridge and Bypass

Ms Rachel Squire: To ask the Secretary of State for Scotland if he will make a statement on the replacement of the Kincardine bridge and bypass. [783]

Lord James Douglas-Hamilton: We shall undertake public consultation in the early new year on the conclusions of the recently completed studies of the options at Kincardine. That will allow local interests to set out their views directly on the options and ensure that we can make the fastest possible progress on implementing necessary improvements.

Ms Squire: Is the Minister finally agreeing to listen to the people of Kincardine, whose health is being damaged by traffic, noise, congestion and pollution levels equivalent to those in Greater London? Does he agree that the Kincardine bridge must be replaced by the end of this decade and is the main alternative route across the Forth for east and central Scotland? Will he clarify the timetable for the bridge's replacement and the building of a bypass and confirm that Government money has been allocated for that work to begin in the near future?

Lord James Douglas-Hamilton: I can reassure the hon. Lady that we shall progress as fast as possible towards construction. Subject to statutory procedures and the necessary competitive processes, we should be in a position to start before the end of the century. Exhibitions are to be held in Kincardine and Alloa early in the new year. A number of routes will be shown, information will be displayed setting out their merits and the public will be invited to comment on the solutions—there will be a consultation process. After that, orders will be published. Issues such as environmental considerations have to be considered, as do those that concern local residents. We want to see progress as soon as possible.

Mr. Connarty: It is clear from the Minister's reply that, by 2000, the bridge will be in the constituency of Falkirk, East, as the boundary commission has decided that the area on the other side of the river will be in my constituency. From working with my hon. Friends the Members for Dunfermline, West (Ms Squire) and for Clackmannan (Mr. O'Neill), I know that we are trying to obtain the best solution for people on both sides of the river. Much of the traffic that crosses the bridge is generated from Grangemouth and we want the Government to come forward with the money soon. It is not good enough to say that action will be taken in 2000. As my hon. Friend the Member for Dunfermline, West said, people in Kincardine have suffered for 20 years.

Lord James Douglas-Hamilton: The Scottish Office will publish the statutory orders for its preferred scheme around the end of 1996. The precise date will depend on public responses to the exhibition, but we intend to make the fastest possible progress. The hon. Gentleman should not anticipate the results of future elections any more than the rest of us, but I note his interest in the matter.

Historic Buildings

Mr. Gordon Prentice: To ask the Secretary of State for Scotland what measures he will take to ensure the structure and fabric of historic buildings in Scotland is properly preserved. [784]

Lord James Douglas-Hamilton: Owners of historic buildings are responsible for the maintenance of their own property. We provide advice, encouragement and financial support.

Mr. Prentice: That is simply not good enough. I do not think that the Minister has read the latest report of the Historic Buildings Council for Scotland, which says that shoddy, synthetic and often imported materials are being used to restore Scotland's built heritage. That is not good enough. Will the Minister take steps to reopen some of the traditional slate and stone quarries so that those materials can be used to restore Scotland's historic buildings? Scotland's heritage is being compromised by the Government's policies.

Lord James Douglas-Hamilton: I can reassure the hon. Gentleman that Historic Scotland is building up the necessary expertise in Scotland. We must learn some ideas from overseas, but I assure him that we are concentrating on employing people in Scotland. The hon. Gentleman's old school, George Heriot's in Edinburgh, has benefited considerably from building repair grants totalling £185,000. If he wishes to assist his old school, he should remind his colleagues on the Opposition Front Bench that 244 of its pupils benefit from the assisted places scheme and would like to see it continue.

Mr. Jessel: As Scotland's heritage of historic buildings is world famous and a prime tourist attraction, will my hon. Friend join me in welcoming substantial new funds from the national lottery to protect Scotland's heritage? The lottery is a brilliant achievement of the Conservative Government.

Lord James Douglas-Hamilton: The lottery has achieved results out of all proportion to what was anticipated initially. We believe that it will be of enormous benefit not only to our built heritage, but to many charities and small organisations throughout Scotland.

Mr. Wilson: Will the Minister approach Historic Scotland about the regrettable absence of any physical memorial in Scotland to the poll tax, given that it was possibly one of the most costly exercises in Scotland since the Darien scheme? I suggest that a derelict public toilet in Stirling could be adapted for the purpose. Perhaps a plaque on the wall might refer to the fact that the last time that the local Member of Parliament engaged in a bit of phrase-making and dubbed a Labour proposal the "roof tax", the Tory party adopted the proposal within three months.

Lord James Douglas-Hamilton: I recall that the hon. Gentleman strongly opposed plans for a Scottish Assembly a few years ago. Rather than erect such a memorial, I think that our built heritage should receive greater priority.

Local Government

Mr. David Shaw: To ask the Secretary of State for Scotland if he will make a statement on the efficiency and effectiveness of Scottish local authorities. [785]

Mr. Forsyth: There is considerable scope for improvement.

Mr. Shaw: My right hon. Friend may be aware that I have just returned from giving evidence this morning to the Monklands inquiry in Scotland. He may not be aware


that, on departing the inquiry, the leader of the council made his usual threats, including threatening to visit me and my family. Does my right hon. Friend believe that such people should be in charge of councils in Scotland? Does he believe that the Labour party has a lot to answer for over the failings of local government in Scotland?

Mr. Forsyth: I am sure that my hon. Friend will understand why I am not in a position to comment on his remarks. In defence of the Labour party, I am sure that it is as anxious as the Conservative party to ensure the highest standards of conduct in local government. The hon. Member for Hamilton (Mr. Robertson) welcomed the recent establishment of the 211 inquiry in respect of the North Lanarkshire authority. I think that it is important to proceed on the basis that the House is determined to ensure the highest standards in local government and that we have the means to investigate any complaints swiftly and bring any shortcomings to book. I hope that all hon. Members will consider local government or any other matter of public life on that basis.

Mrs. Fyfe: As the Secretary of State chooses to dismiss with a wave of his hand all Scottish local government, will he join me in praising Glasgow district council's plans to eradicate dampness in 80,000 council houses? On his current plans for spending on Scottish housing, in what year does he expect to eradicate dampness in Scottish houses?

Mr. Forsyth: I am all in favour of councils tackling damp houses and providing key services. The hon. Lady makes a gesture indicating that they need more money. I suggest that she uses what influence she has with Glasgow district council and other Labour-controlled councils to get them to spend less on chiefs and more on indians and to spend less on expensive, highly paid officials and more on the people who do the work. If they did that, we might have more effective authorities. If she could even encourage the councils concerned to go for value for money and become enabling authorities, the people who depend on their services might get a better deal.

Mrs. Gorman: Can my right hon. Friend confirm that for every pound of tax collected in Scotland, the people who live there receive something like £2 in value? Does he agree that local government in Scotland, as well as historic houses and the building of new bridges, depends on the maintenance of the Union with the rest of the British Isles and that those strident Opposition Members who continually demand the separation of Scotland are likely to cause a great deal of loss to the people of Scotland on such projects?

Hon. Members: What about the Skye bridge?

Mr. Forsyth: I agree with my hon. Friend. The Skye bridge represents a considerable success for the Government. It was first promised in 1936, it was delivered by the Government and it will be toll free in 15 years unless the hon. Member for Cunninghame, North (Mr. Wilson) has his way, in which case the tolls will last for longer because he is encouraging people not to pay them.
I wonder how many Opposition Members know that local government in Scotland receives 45 per cent. more per head in Government grant than local government in England. That is a huge additional means of support and they would put all that at risk with their proposals for a Scottish Parliament.

Mr. Malcolm Bruce: Does the Secretary of State acknowledge that there is concern about the transition to unitary authorities in respect of how the equalisation will be carried through between high-spending and low-spending authorities? What steps will he take to ensure that there is not an unfair burden on rural authorities having to subsidise urban authorities? Will he step in and ensure that the transition is fair and just to all taxpayers in Scotland?

Mr. Forsyth: In the spirit of partnership and co-operation with local government that I have tried to encourage since I arrived at the Scottish Office, I am attracted by the proposals of the Convention of Scottish Local Authorities to allow for the changes to be phased in so that rural areas that will suffer and those authorities that stand to gain will have the opportunity to adjust. COSLA's proposals are quite sensible as the time period will be kept to an absolute minimum and benefit will accrue to authorities that will gain immediately. I am sure that everyone will recognise it as a sensible way forward.

Mr. McAllion: Does the Secretary of State accept that ill-tempered, ill-informed and inaccurate attacks on elected councils by the likes of the hon. Member for Dover (Mr. Shaw) serve merely to weaken an already weak Government case in Scotland, particularly when in Scotland this morning the same hon. Gentleman admitted under oath that his allegations were based on circumstantial evidence and anonymous correspondence? Would it not be better for the likes of the Secretary of State for Scotland, who currently pays chief executives of NHS trusts such as Grampian Healthcare more than £100,000 a year, to stop attacking chief executive of local authorities in Scotland who manage bigger budgets and larger work forces but are paid considerably less? If the Secretary of State is serious about working together in a spirit of co-operation to improve local government in Scotland, let us have an end to such scurrilous and unfounded attacks on Scottish local democracy, return to co-operation with local government and have a completely different relationship between central and local government in future.

Mr. Forsyth: I am sorry that the hon. Gentleman did not exercise the discretion that I indicated would be appropriate in respect of the present 211 inquiry. As to employing highly expensive people, the hon. Gentleman might like to look at the number of directors in Glasgow compared with the NHS trusts. I believe that he will find that he is on thin ice.

Mr. McAllion: I should like to know the number.

Mr. Forsyth: I am happy to write to the hon. Gentleman setting out the facts and press-releasing them, and I am grateful for the opportunity to do so.
If the hon. Gentleman is fair, he will acknowledge that some authorities are doing well and are responsible in terms of the number of people that they employ on high salaries. Other authorities seem to have lost their place. The hon. Gentleman, as a responsible person in the Labour party, should do what he can to ensure that the taxpayers' interests are protected. I recommend that the hon. Gentleman looks at what is happening and uses his influence to ensure that we get efficient local government.

Former Yugoslavia

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Malcolm Rilkind): With permission, Madam Speaker, I should like to make a statement on former Yugoslavia.
The conflict in former Yugoslavia is Europe's most tragic problem. Two hundred thousand people have lost their lives over the past four years, and more than 1.5 million have lost their homes. The conflict has caused suffering and destruction on a scale not seen in Europe since the second world war.
From the start, Britain has upheld the principles that internationally recognised borders must not be altered by force and that the legitimate rights of all ethnic groups must be properly protected by their Governments. We have therefore had three objectives—to save lives, to draw the parties away from the military option towards a negotiated settlement, and to prevent the spread of the conflict.
The Government warmly welcome the agreement initialled in Dayton yesterday. We applaud the work of all the negotiators. I congratulate the leaders of the parties to the Bosnia conflict, who have shown the wisdom and courage to make the hard choices and difficult compromises needed for peace. We must recall with gratitude the work of all those who laid the foundations for this achievement—notably Lord Carrington, Lord Owen, Cy Vance, Thorvald Stoltenberg, Carl Bildt and the American officials who died so tragically a few weeks ago while engaged in earlier stages of the negotiations.
The full text of the peace agreement will be placed in the Library as soon as it is available. It is a detailed and complex document. I will not attempt to describe it in detail to the House now, but I shall highlight some key elements.
The agreement maintains a single unitary Bosnian state within internationally recognised borders. There will be a central three-man presidency with representatives from each of the three ethnic groups, a Council of Ministers and a central Parliament. Underneath those central structures will be two entities—the federation and the Republika Srpska, each with substantial autonomy.
Elections for the central presidency and Parliament and for the institutions of both entities will be held within nine months of signature of the agreements. The Organisation for Security and Co-operation in Europe will supervise those elections. There are to be special arrangements for refugees and displaced persons, who will be encouraged to return and will have the option of voting where they lived before the war.
Individuals indicted for war crimes will play no part in future public life in Bosnia. The United Kingdom continues, moreover, strongly to support the work of the war crimes tribunal. We believe that persons responsible for atrocities should be tried. We look to all the states of the region to fulfil their international obligations.
Sanctions against the Federal Republic of Yugoslavia are to be suspended immediately. They will be formally lifted 10 days after free and fair elections have been held in Bosnia. There will also be a phased lifting of the arms embargo, alongside the establishment of an arms control regime.
Territorial issues were the most difficult to settle and took the talks to the brink, but the settlement meets the contact group proposal of a 49–51 per cent. split between the Republika Srpska and the federation. That meets the crucial principle of maintaining Sarajevo as a united city—a principle that the British Government have supported throughout.
It would be foolish to underestimate the size of the task that the international community now faces. The first requirement is that the parties live up to their commitments. Unless they abide by what they have agreed, and work to make the settlement a success, the documents initialled at Dayton are just pieces of paper. The history of this conflict is one of broken agreements. Now, as never before, promises must be kept.
The international community will deploy an international force to Bosnia following signature of the agreement to supervise the withdrawal of respective armies to the agreed zones of separation. It is the wish of the parties that NATO take the lead in establishing such a force. We hope to see a number of non-NATO nations, in particular Russia, working with us in this force.
Apart from the OSCE supervision of elections, the international community must also establish an international police task force to advise and train the local police forces, and oversee the establishment of the agreed central structures. The international humanitarian agencies must meet the continuing needs of the Bosnian population and monitor the human rights of returning refugees. With the World bank in the lead at technical level, the international community must help with the task of economic reconstruction in the region: restoring infrastructure and utilities, stimulating the development of market economies, and encouraging economic interaction in the region.
We will therefore hold a peace implementation conference in London, to mobilise the international community for the tasks ahead. This conference will ensure that the military operation meshes with the civilian, and that tasks at the crucial civilian/military interface are properly handled. It will establish a co-ordination structure with a senior political figure, the high representative, at its centre. It will ensure that those supervising the elections, assisting with economic reconstruction and undertaking humanitarian tasks, will work together as part of a coherent implementation plan. It will help to pin down the parties' agreement to the details of implementation.
We must also decide nationally how we shall contribute to peace implementation in Bosnia. We expect to play a central role alongside our American and French allies in a NATO implementation force. In particular, I should emphasise that the early commitment of the substantial United States ground troop presence which the US Administration propose is a prerequisite for our participation. We expect to arrive and leave alongside our American and French allies. But we now need to study the details of the peace agreement. We must ensure that our forces would be acting in conditions of reasonable safety, that they would have the consent of the parties, and that the burden is being shared equitably among allies, before we take final decisions.
The agreement in Dayton is an historic event. An end to the brutal and tragic conflict in former Yugoslavia is now within our grasp. But we are not there yet. With the


London peace implementation conference, and a British contribution to a peace implementation force in Bosnia, Britain will play a central role in ensuring that the agreement in Dayton is translated into a peaceful future for all the people of the region.

Mr. Robin Cook: May I begin by adding our welcome for the fact that an agreement for peace in Bosnia has been reached? We give a particularly warm welcome to the provision that Sarajevo is to be once again a united city. The courage of its citizens through three winters of Beige has been a tribute to human endurance, and it is right that they should be rewarded by its restoration as a single, multi-ethnic city.
We also welcome the Government's intention to host the forthcoming conference on the implementation of the peace agreement. I must warn the Foreign Secretary that implementing the peace accord will require as much effort and patience as achieving agreement to it in the first place. I assure him that he will have our full support for any responsible proposal to reinforce the British forces in Bosnia to assist with policing the agreement.
British troops have every right to be proud of their contribution in bringing humanitarian relief to 2 million citizens who would otherwise not have lived to witness today's peace. The nation will now want British troops to finish the job by helping to establish the peace. May I invite the Foreign Secretary to take this opportunity to appeal to the leaders of Congress to give the bipartisan support for the deployment of United States troops that is necessary to implement an agreement successfully brokered by the United States President?
The Foreign Secretary will know that the key test of the peace agreement will be whether it restores in fact, as well as in name, a single, multi-ethnic Bosnian state. Does he recognise the existence of doubts about whether the agreement provides for a lasting foundation for a united Bosnia, and provides for a Serb republic within that united Bosnia, with its own Government, citizenship and army? Can he assure us that the House is not being invited to accept a peace agreement that restores a multi-ethnic Bosnian state as a legal formality, but in practice partitions the country between ethnic groups? What guarantees are there in the agreement that the Serb territory—or, for that matter, the Croat territories—cannot secede into a greater Serbia or a greater Croatia?
As the House knows, the greatest revulsion caused by the tragedy of the former Yugoslavia arose from the practice of ethnic cleansing. We therefore welcome the Foreign Secretary's assurance that refugees will have the right to return to their homes. May I press him, however, to tell us what that commitment means in practice? What protection will be available to Muslim refugees who wish to return to Srebrenica and Zepa, which were the scene of recent massacres?
What commitment did President Tudjman give to honour the right of return of the 200,000 Serbs who fled from Krajina? They can have no confidence in their safety if those responsible for ethnic cleansing remain free. We therefore welcome and endorse the Foreign Secretary's strong commitment that those guilty of war crimes must be brought to justice before the international tribunal. There can be no reconciliation within Bosnia unless there is no immunity for the war criminals.
This week's peace agreement was possible only because of the increased resolve that the international community recently demonstrated in retaliating against aggression and attacks on the safe areas. Had the international community shown the same resolve two years ago, tens of thousands of Bosnians might not have lost their lives, and hundreds of thousands of refugees might not have lost their homes. Until today, Bosnia has represented the failure of international intervention; now the international community has an opportunity to demonstrate that this peace agreement represents the success of such intervention. We must not fail in our resolve to take that opportunity, and to secure peace in Bosnia.

Mr. Rifkind: I thank the hon. Gentleman for his support for the work in which we are engaged, and I strongly endorse his observation that we must appeal to Congress to respond in a similarly bipartisan way. I have no doubt that British forces in Bosnia have been greatly heartened, and their morale greatly strengthened, by the knowledge that there is such a broad spectrum of support for the work that they have done in the past few years—support from hon. Members on both sides of the House. If it is clear—as I believe it will be—that that broad support will be available to them for the work of the implementation force, I believe that that will make what will inevitably be a difficult task at least easier to face. We very much hope that Congress will address the issues in a similar way.
The hon. Gentleman is right to say that there had to be doubts—that was the word that he used—about the lasting nature of a settlement of the kind that has been announced. It would be foolish to be over-optimistic about the future. We must take it step by step. We have achieved what is—in the context of the past three years—an extraordinary breakthrough, in the form of a settlement signed by the three political leaders. I believe that a degree of exhaustion helped to contribute to that. I also think it important for the Bosnia to which the three political leaders have agreed to be a unitary Bosnian state with a central presidency, incorporating representatives from each community. That will provide a better prospect of success.
The hon. Gentleman is also right to emphasise the need to ensure that the right of refugees to return is not an empty right. Of course, the next few weeks and months will show whether that can be delivered, and it must be one of the prime tasks of the international force to assist the process.
The hon. Gentleman concluded by suggesting that the past three years had been years of failure, which may now turn into success. I hope that on reflection he will reconsider the use of that term. Yes, there have been massive disappointments, but I believe that the extent to which the international community saved many hundreds of thousands of lives prevented the conflict from spreading elsewhere in the Balkans and helped to provide the framework that has led to the peace settlement. That is not only worthy in itself, but unprecedented. I can think of no comparable past conflict in which the international community has been able to achieve so much. The fact that we did not achieve nearly as much as we would all have liked is not evidence of failure; it just shows how painful and difficult the task is.

Mr. David Howell: Does my right hon. and learned Friend accept that his balanced and cautious


assessment of the prospects for the deal is about right, and that there are many problems and difficulties still to be overcome? He talked about troops arriving and leaving. I am sure that he would accept that a great deal of cement will be needed to keep the agreement in place—and indeed, to make it work at all. That will involve a heavy and sustained commitment by NATO for a long while ahead. Does my right hon. and learned Friend feel that not only we but our American allies are committed to the long haul in terms of troop commitment which alone will ensure that the situation becomes stable again?

Mr. Rifkind: We are not contemplating a long haul in the sense that my right hon. Friend appeared to imply by his question.

Mr. Andrew Mackinlay: As in Cyprus?

Mr. Rifkind: It is important to reflect on the fact that—unlike the situation in Cyprus, which the hon. Member for Thurrock (Mr. Mackinlay) has mentioned—the implementation force is going to Bosnia after a political settlement, not instead of a political settlement, as happened in Cyprus. That has been one of the major difficulties with that island over the years. A closer parallel might be Cambodia, where an international force went in after a political settlement, helped to cement the agreement and was withdrawn after a given period.
It is part of the thinking of the international community that the NATO-led force should be very large, so as to establish its authority at an early stage. We hope that, if it succeeds in its efforts, it will be possible to scale down its size over a relatively limited period. At the moment, the planning envisages the presence of the international force for up to a year. I appreciate that, on the basis of experience, it is difficult to guarantee such a period, but I emphasise that the role of the international force is not as a permanent international military presence, but to assist the Bosnian parties in the implementation of what has been agreed and then to withdraw.

Mr. Menzies Campbell: While we congratulate the British forces on the contribution that they have made in Bosnia, does the Foreign Secretary agree that we should be slow to congratulate ourselves, as it has taken four bloody years for the international community to achieve that fragile peace? Is it not also salutary for Europe to remember that the whole-hearted military, political and diplomatic leadership of the United States was required before the peace could be achieved? Finally, if the United States cannot put troops on the ground, can NATO ever be the same again?

Mr. Rifkind: A NATO operation cannot take place without the United States; I am sure that there can be no ambiguity about that. The hon. and learned Gentleman referred to the four years that it has taken to reach this stage, but he should reflect on the fact that, if those who are fighting a war are determined to pursue that war, there is little that external countries can do unless they wish to become combatants in the conflict—not a solution that the hon. and learned Gentleman has ever advocated. Therefore, the prime responsibility for the time that it has taken for the war to come to a conclusion must lie with the combatants.
Of course, the hon. and learned Gentleman is correct to say that the necessary involvement of the United States in achieving the progress that has been made should be a

clear indication of the insufficiency of a purely European response to a problem of that kind. Clearly the problem of Bosnia has caused concern and reactions all around the world, not only in Europe but in Islamic countries as well as in the United States. It has required an international response.
That is why, over the past couple of years, the United Kingdom, France and other western European countries have sought to persuade the United States to give its full diplomatic weight to the prospects for a negotiated settlement. We are pleased and satisfied that the United States responded to that advice, and we have gradually seen the improvements on which I am reporting today.

Sir Patrick Cormack: Notwithstanding my right hon. and learned Friend's remarks, does he accept that many people perceive that the much more united and determined approach and the true resolve that we have seen in recent months—to which my right hon. and learned Friend has made a contribution, for which I thank him—has resulted in the settlement? Does he agree that it is now essential that that resolve is maintained and that the momentum is not lost? In that context, will he tell the House when he expects the London conference to be held?

Mr. Rifkind: There are a number of reasons why we have seen progress in recent weeks, the most important of which has been the effect of the pressure on President Milosevic and his decision to break with Karadzic and Mladic and push for a political settlement. The last London conference—which led to the establishment of the rapid reaction force led by Britain and France—was important, as was the American initiative, to which I have paid tribute. We are expecting the peace implementation conference to be held in very early December, and we are discussing dates with allies and other relevant countries at present.

Mr. Tony Benn: Is the Secretary of State aware that there are other interpretations of what has happened? The break-up of Yugoslavia was brought about by the recognition of Croatia by Germany, and has been followed by the arming of Croatia by the United States, the use of massive air strikes—in which more bombs were dropped by NATO than by all of the other parties throughout the war—and the ultimatum at Dayton. Is it really the case that a NATO occupation of former Yugoslavia—for that is what is involved, with about 60,000 troops deployed to keep the peace—and the requirement to introduce a market economy constitute anything other than a very unstable future which sidelines the UN? That is one of the anxieties that many people will feel when they hear what the right hon. and learned Gentleman has said.

Mr. Rifkind: The right hon. Gentleman is not correct in his historical analysis or in his current assessment. I believe that the break-up of Yugoslavia was inevitable once Slovenia and then Croatia had decided to secede from that country. The question of recognition by other states may have had some impact on the precise consequences of that, but the break-up was inevitable for internal reasons, not external.
The right hon. Gentleman referred to the proposal as a "NATO occupation" of Bosnia. He is quite wrong in that suggestion. Part of the agreement that all three parties have signed is a desire that NATO and other countries,


including Russia, should provide an international force to help monitor and implement the settlement. We are not going into Bosnia against the wishes of the Bosnians—quite the opposite. It is part of their request. The Bosnians recognise that, without that international force, the settlement will collapse and we will be back to the carnage that we have seen in recent times.

Sir Dudley Smith: Is my right hon. and learned Friend aware of the invaluable role played by the Western European Union in securing the blockade on the Adriatic, and—where the embargo was concerned—in policing the Danube in Hungary, Romania and Bulgaria? These countries have been helpful. Is he further aware that the WEU is ready and willing to do whatever tasks are assigned to it in the new and much more hopeful situation?

Mr. Rifkind: My hon. Friend is right. The WEU has provided useful assistance, and there may be further opportunities for the WEU to provide practical support to the efforts of the international community. That is something that we warmly welcome.

Mr. Robert N. Wareing: Does the Foreign Secretary really believe that, in a short space of time, refugees can go back to towns such as Srebrenica? Can he tell the House what is to happen to the 6,000 regular Croatian troops presently stationed in Bosnia? Will they be withdrawn? Does he honestly believe that an imposed peace can ever be a permanent peace?

Mr. Rifkind: Naturally we expect that all troops from outside Bosnia will return home in the near future, and that would apply to regular troops from countries such as Croatia. The hon. Gentleman is correct to emphasise the difficulties for refugees trying to return to areas that remain occupied by another community. That will be a difficult task in Bosnia, just as it has been difficult in many other parts of the world where there have been political settlements, but not of a form that makes the return of refugees as easy as we would wish. That will be one of the tasks to work on. I doubt whether we will achieve the success that we would like, but we must try to achieve whatever is possible in that sphere.

Mr. Michael Jopling: Does my right hon. and learned Friend agree that, following political agreement and with NATO troops on the ground, we are entering a particularly dangerous period for us all, not least because of Russian participation in the area? If the agreement, like so many others, is torn up and more fighting starts, to what extent will NATO troops be prepared to move from a peacekeeping role into a role of peace enforcement?

Mr. Rifkind: The Russian involvement so far has been helpful and valuable because it has enabled the Security Council to speak with a single voice and enabled the contact group to operate in the ways that led to the negotiated agreement announced yesterday. My right hon. Friend speculates about the possibility of the settlement disintegrating. The question that has to be asked is whether that might happen as a result of the actions of one party or as a result of the general disinclination of all the parties.
Clearly, if one party did not fulfil its obligations, the whole weight of the international community would seek to ensure that it respected the treaties into which it had voluntarily entered. If there was a lack of will on the part of all the parties, the whole settlement would inevitably collapse and we would be back to the situation in Bosnia that we have seen in the past four years.

Mr. John D. Taylor: Although naturally we welcome the statement by the Secretary of State, we none the less share the caution that he has emphasised. We on the Ulster Unionist Bench in particular note the enthusiasm of the Secretary of State for the total exclusion from all-party talks and from any future democratic developments in Bosnia of those who during the past four years have been involved in paramilitary and terrorist activities.
The Secretary of State stressed the importance of the new central parliament and Government. Will that parliament and Government be in control of the armies within Bosnia, or will two separate armies continue to exist under separate Governments in Bosnia? Can the Secretary of State give us some guidance as to the total number of United Kingdom forces present in Bosnia under both the United Nations and NATO?

Mr. Rifkind: Those excluded from political and public life will be limited to those who are indicted as war criminals. They will not include those who come within the slightly wider definition that the right hon. Gentleman suggested. We look forward to the day when there will be a gradual reintegration of the military forces in Bosnia. That cannot happen immediately. It will take time, as it has taken in other parts of the world where similar problems have existed. We have seen in South Africa how the competing armies have been gradually integrated into a single new South African defence force. I do not say that that will happen, but it must be the objective that we work towards in Bosnia.
We are still giving consideration to the precise details of the British contribution in Bosnia. It is likely to have two elements: the forces which are currently there under UNPROFOR, which may become part of a new NATO-led force, and the headquarters of the whole NATO force provided by the allied rapid reaction corps based in Germany. Britain is a framework nation of that and, therefore, a significant proportion of headquarters manpower will be from the United Kingdom.

Mr. Jonathan Aitken: Will my right hon. and learned Friend confirm that the American War Powers Act requires clear and unambiguous congressional commitment to the proposal that a large number of American ground troops should be sent to Bosnia? Is he confident that the commitment will be given by Congress? Is he aware that there are a great many ambiguities in the statements of the American Administration, which need to be clarified? For example, Secretary of Defence William Perry has spoken of the American peacekeepers leaving within one year, which may seem to some of us a remarkably short haul. Would he confirm that, before British troops are committed, Congress must be on board for what will be a long and perilous haul?

Mr. Rifkind: I certainly confirm my right hon. Friend's final point. In my opening remarks, I said that British forces would enter and leave at the same time as United States forces. There can be no question of any


different approach. It is for the United States Government to determine the constitutional requirements within the United States for the deployment of American forces. The President has already indicated that he intends to enter into early consultations with both Houses of Congress, and it is worth recollecting that the vote in the House of Representatives a few days ago did not reject American participation, but emphasised the need for that House to agree to such a proposition and for that case to be argued. The President has indicated that he accepts total responsibility, to ensure that American forces are deployed. We wish him well in that task and will give him our full support.

Mr. Dennis Skinner: Is the Foreign Secretary aware that, given fair wind, the treaty might last long enough to carry it beyond the American presidential elections in about a year from now and, perhaps, just beyond the British general election? Will he also comment on the fact that it is rather curious that, in this so-called peace treaty, no matter how long or temporary, as opposed to the one in Ireland, there is no talk of decommissioning; in fact, there is the opposite—there is going to be a lifting of the arms embargo? How does he manage to approve those double standards?

Mr. Rifkind: The hon. Gentleman is wrong. It is likely that arms control discussions will take place, hosted internationally, to ensure that there is a progressive reduction of military equipment within Bosnia to the amount that is reasonably required by any country in the modern world.

Mr. Nigel Forman: Is my right hon. and learned Friend aware that many Conservative Members will want him and his colleagues to keep the duration and nature of our commitment in the former Yugoslavia closely under review? Can he confirm that the likely number of British troops committed to that unfortunate territory may initially be about 13,000? Can he tell the House, more clearly than he has been able to do so far, exactly what they will be doing? Will they be there in support of the civilian power? If so, which is it, and what is the parallel with the normal support for the civilian power in places such as Northern Ireland?

Mr. Rifkind: I can give my hon. Friend certain additional information. Certainly, in the first few weeks, the prime purpose of the implementation force will be to monitor the implementation of the settlement. It provides for the forces of the Bosnian federation and Republika Srpska to withdraw from the existing confrontation line and for a safety zone to be inserted between those two confrontation areas to prevent a resumption of hostilities. Part of the responsibilities of the force will be to man that area and thereby ensure that what is a ceasefire becomes a permanent peace. They will also have responsibility for much of the monitoring of what is happening in regard to the other parts of the agreement, much of which will require civilian assistance, but may also have a military component.
On the size of the British force, my hon. Friend mentioned 13,000. I would not want to be committed to a specific figure, but I do not expect it to be significantly different from that level.

Mrs. Margaret Ewing: Like other hon. Members, I welcome this step, while realising that it is

only the beginning of what might be a long and fairly tortuous route to ensuring a lasting peace in the former Yugoslavia. With reference to the peace implementation conference, can the Secretary of State define more clearly what is meant by a high representative, because he or she, whoever the person may be, will have a critical role to play and will have to have the confidence of all the groups involved in what has been a disastrous conflict for Europe?
Will he also say whether there is any definition at this early stage of who will have the final responsibility for the establishment of the membership of that conference? Will it be the United Nations, the European Union, the United States, the North Atlantic Treaty Organisation, or the United Kingdom Government? Obviously, those details have to be worked out and may appear in the document that is to be placed in the Library, but it would be helpful if we had some ideas on that matter at this stage.

Mr. Rifkind: On the latter part of the hon. Lady's question, the last suggestion that she made was correct. It will be the United Kingdom Government, who are hosting the conference, who will issue the invitations. Clearly, we will take account of all those who have a relevant contribution to make.
The hon. Member for Moray (Mrs. Ewing) is also correct to say that the high representative will be a crucial participant in the work of the international community in Bosnia in implementing the settlement. I mentioned earlier that NATO will, of course, be leading the implementation force but NATO is a military organisation. There is a need to ensure that the political oversight and the civil co-ordination are also in the hands of someone who is responsible for these matters in a credible and effective fashion.
The high representative will be responsible for the co-ordination between the civil and military roles and for supervising the electoral process. It is quite likely that the Organisation for Security and Co-operation in Europe will have the immediate responsibility in that area but the high representative will be keeping a watchful eye on the elections that are to be held as part of the settlement and questions like the return of refugees, the economic reconstruction of Bosnia and matters of that kind will fall within his remit.

Several hon. Members: rose—

Madam Speaker: Order. This is an important agreement, and I want to try to be helpful to the House and call all those Members who have heard the entire settlement statement of the Foreign Secretary. It would help me and the business to come if we could now have brisk exchanges, so that I can call all the Members concerned.

Mr. John Wilkinson: Can my right hon. Friend explain exactly how the high representative is to be chosen, what nationality he will be, how he will relate, if that is the right word, to the theatre commander of NATO, and whether the Russians will accept his authority or whether they will refer back to their national Government in anything they are called upon to do?

Mr. Rifkind: Thought is being given at the present time to both the identity and the specific tasks of the high


representative. I think it is likely that agreement will be reached and a conclusion announced at the peace implementation conference to be held in London. Already much of the work has been done, but I think that that will enable the various threads to be drawn together. That will be one of the items on that particular agenda.

Mr. Calum Macdonald: Will the Secretary of State say something more about the status of individuals indicted for war crimes? Surely we must require more than that they are simply barred from political life. Must not the international community require that they be returned to The Hague for examination and trial for war crimes, and should it not be a requirement of any level of government in Bosnia that, in return for any political and economic assistance, they must comply with the requirements of the war crimes tribunal in The Hague?

Mr. Rifkind: We attach importance to the requirements of the war crimes tribunal being respected. The reference to participation in public life was clearly part of the political settlement announced yesterday, and it was important for it to be clarified that such persons would not be able to participate in the public life of Bosnia in future. How those persons are returned for trial is a separate but also very important issue, and will have to be addressed in its own context.

Lady Olga Maitland: Does my right hon. Friend agree that, for the peace in Bosnia to be permanent, it would need conformation to that agreement by Mr. Karadzic and General Mladic? I understand that they have been indicted for war crimes and that they will be removed from public life, but will my right hon. and learned Friend clarify exactly what their position will be, bearing in mind that there is a real danger that, if they had personal freedom to move around, they could create an insurrection behind the scenes? That is an important factor, and we should face up to the very real dangers that could emanate from their movements.

Mr. Rifkind: The starting point is that the negotiating powers on behalf of the Bosnian Serbs were given to President Milosevic. That has been one of the reasons that we have achieved the progress that has been realised. It is also important to look to the elections that will be held for the Bosnian Serbs as well as for the other communities in Bosnia and that we hope will enable a new legitimate leadership to emerge that can speak for the Bosnian Serb interest.

Mr. David Winnick: Should not the American Administration be warmly congratulated on achieving, with much difficulty, what European countries, no doubt with good will, were not able to achieve in the past four years? Is the Foreign Secretary aware that those of us who took, by and large, the Bosnian position recognise all the weaknesses—and have the reservations—rightly expressed by my hon. Friend the Member for Livingston (Mr. Cook), but believe that it is the best possible agreement that could have been reached

in the circumstances, should be supported on the ground and deserves full support from all those who live in Bosnia?

Mr. Rifkind: I very much agree with the hon. Gentleman.

Mr. Mackinlay: Further to the Foreign Secretary's reply to the hon. Member for Carshalton and Wallington (Mr. Forman), is there not a need for clarity and precision about the role of the international forces, who are headed by a British general? Will not those forces be involved in enforcement rather than peacekeeping? Are not British soldiers going to have the unenviable task of enforcing population movements? I fully recognise that those involved will be returning refugees and that the forces will have to see that they get back. Under the terms of reference now being considered by British generals in Germany, is it not a fact that the forces will have to enforce the movements of civilian populations, if need be, at the end of a bayonet?

Mr. Rifkind: It is proposed that the NATO-led force will have extremely robust rules of engagement. The objective is to ensure that by virtue of both it size and its capability, it will be able to assist in the implementation of the settlement. That enables the rules of engagement to be significantly more robust than in the past.

Ms Angela Eagle: Will the Foreign Secretary say a bit more about the arms reduction talks? Does he agree that the worst possible scenario would be for there to be a huge increase in the buying-in of weapons in the various areas of the former Yugoslavia, for the peace then to unravel and for us to end up with an even bigger conflagration as a result of lifting sanctions too early?

Mr. Rifkind: The hon. Lady is correct; there are, indeed, dangers in the lifting of the arms embargo. For that reason, it has been agreed that the lifting of the arms embargo should be a phased process taking place over six months. It will also be an early intent to have an arms control conference, so it is the intention that there should be proper consideration of the implications for the future of military equipment and military assets within Bosnia and that conclusions can be reached on that within the six-month period. By the time, therefore, that the arms embargo may be lifted on all the parties, we shall have a much clearer picture about the implications of these matters.

Mr. Ted Rowlands: Following that point, how does one phase an arms embargo? Will it be based on the type of material or the type of equipment that will be allowed in the six months? Given that the right hon. and learned Gentleman is now saying that there will be a NATO force of 60,000, what phasing will take place?

Mr. Rifkind: The agreement envisages two phases. After three months, there should be a partial lifting of the embargo on light weapons and other such equipment, but there will still be an embargo for a further three months on artillery, heavy weapons, mines, military aircraft and other equipment of that kind. That is the phasing that is envisaged.

Mr. Harry Barnes: Is the Foreign Secretary aware that there are many decent and honest people in Serbia, Croatia and Bosnia who bravely stood out for a considerable period for peace,


reconciliation and a multi-ethnic society? Is he aware that those people, often organised in their own small political parties and within community groups, have been sidelined until now, whereas the warlords have been considered all the time? Will the new situation give an opportunity for those people in Bosnia, such as the Tuzla Civic Forum, to find expression and to influence future developments?

Mr. Rifkind: The hon. Gentleman's remarks give added force to the need for the elections to take place at the earliest possible practical date. That will enable the wishes of the people of Bosnia to be reflected in their political leadership.

Mr. Mike Gapes: Given the difference in the timetable—nine months for elections and six months for phasing out the arms embargo—will there not be the serious problem, when the United States decides that it wishes, presumably, to arm one side of the federation against the Republika Srpska and when there is no legitimacy for a new three-person presidency, that in effect, the United States will be arming one side in a continuation of the conflict? What thought has been given to dealing with that problem?

Mr. Rifkind: The proposal is that the elections should happen not later than nine months hence. If circumstances permit earlier elections, that would clearly be highly desirable, in part for the reasons to which the hon. Gentleman has referred.

WELSH GRAND COMMITTEE

Motion made, and Question put forthwith, pursuant to Standing Order No. 98 (Welsh Grand Committee)

That the Matter of the implications of the Gracious Speech for Wales, being a Matter relating exclusively to Wales, be referred to the Welsh Grand Committee for its consideration.

That the Matter of the implications of the Budget for Wales, being a Matter relating exclusively to Wales, be referred to the Welsh Grand Committee for its consideration.—[Mr. Bates.]

Question agreed to.

BUSINESS OF THE HOUSE

Ordered,
That—
(1) Standing Order No. 13 (Arrangement of public business) shall have effect for this Session with the following modifications, namely:

In paragraph (4) the word 'thirteen' shall be substituted for the word 'ten' in line 43; in paragraph (5) the word 'eighth' shall be substituted for the word 'seventh' in line 45;
(2) Standing Order No. 90 (Second reading committees) shall have effect for this Session with the following modification, namely:
In paragraph (2) the word 'eighth' shall be substituted for the word 'seventh' in line 23;
(3) Private Members' Bills shall have precedence over Government business on 19th and 26th January, 2nd, 9th and 16th February, 1st 8th, 22nd and 29th March, 19th and 26th April, 10th May and 12th July.—[Mr. Bates.]

SITTINGS OF THE HOUSE

Motion made, and Question put forthwith, pursuant to Standing Order No. 11A (House not to sit on certain Fridays)

That pursuant to Standing Order No. 11A (House not to sit on certain Fridays), the House shall not sit on the following Fridays:

Friday 1st December, Friday 15th December, Friday 12th January, Friday 23rd February, Friday 15th March, Friday 3rd May, Friday 24th May, Friday 14th June, Friday 28th June and Friday 5th July.—[Mr. Bates.]

Question agreed to.

DEREGULATION

Motion made, and Question put forthwith, pursuant to Standing Order No. 14A(1) (Consideration of draft deregulation orders)

That the draft Deregulation (Building Societies) Order 1995, which was laid before this House on 16th October, in the last Session of Parliament, be approved.

That the draft Deregulation (Greyhound Racing) Order 1995, which was laid before this House on 16th October, in the last Session of Parliament, be approved.—[Mr. Bates.]

Question agreed to.

Orders of the Day — Debate on the Address

[SIXTH DAY]

Order read for resuming adjourned debate on Question

That an humble Address be presented to Her Majesty as follows:—

Most Gracious Sovereign

We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.—[Mr. Hurd.]

Question again proposed.

Orders of the Day — The Economy

Madam Speaker: I have selected the amendment standing in the name of the Leader of the Opposition, and the amendment in the name of the leader of the Liberal Democrats will be put forthwith after 10 o'clock for Division purposes. Between the hours of 7 and 9 o'clock, I must limit speeches to 10 minutes only.

Mr. Gordon Brown: I beg to move, as an amendment to the Address, at the end of the Question to add:
But note Government election promises continue to be broken, with tax increases equivalent to 7p in the pound on income tax imposed to pay the costs of economic failure, with Britain having fallen from 13th to 18th in the world prosperity league since 1979, with investment worse than at this stage of previous economic cycles and living standards having fallen more sharply than for years, with widespread insecurity and one in five households of working age with no-one in work; humbly regret that the Gracious Speech excludes positive measures for jobs, productive investment and opportunities to move from welfare to work; regret the absence of action on the Greenbury Report and the boardroom excesses of the privatised monopoly utilities; regret the absence of a strategy for employment, skills, regional development and industry, including measures to raise educational standards and access to quality training, and to secure effective public-private partnership for infrastructure investment; and calls for the abandonment of rail privatisation and of the Prime Minister's pledge to abolish capital gains tax and inheritance tax.
It is now sixteen and a half years since the Government came to power, and almost five years since the Prime Minister took office. The Loyal Address gives us the opportunity to assess where the Conservatives have taken Britain and where they are now trying to take us. Our amendment makes it clear that the economic test for the Queen's Speech and the forthcoming Budget is what the Conservatives will do to build an investment-rich economy that is equipped with skills, science, training and technology for the future, and whether the Government will take up our proposals to tackle the slowest increase in investment out of recession that we have seen this century.
The Queen's Speech needed to, and the Budget must, tackle the job insecurity that permeates this country, and so reduce the annual billion-pound cost of unemployment. That is why we propose a windfall tax on utilities—to get people back to work. The Budget needs to reunite the nation, as the Queen's Speech should; to build social cohesion and a fairer Britain, including a fairer tax system.
Let us recall the central Conservative promise of 1979, the aim behind the first Loyal Address, and the objective of the first Conservative Budget. The then Chancellor, Lord Howe, said that falling behind our competitors was the issue. He said that Britain's relative decline was
not a prospect that I am prepared to accept."—[Official Report, 12 June 1979; Vol. 968, c. 237.]
He said that ending that relative decline was the real challenge and the central issue, the make or break for the Conservative Government and the decisive test on which the Conservative party should be judged.
Yet what do we find after 16 years? The Conservatives said that their whole strategy was to avoid relative decline, but that has happened. We have not risen above more competitors, as they promised; we have fallen further below them. Only a few weeks ago, the league table for national income per head showed that we are not moving upwards, but we have been moving downwards. We have not reversed that relative decline, but our decline has worsened in relation to our neighbours.
We are 18th in the world league of national income per head. In 1979, we were in front of Italy, but we are now behind it; we were in front of Norway, but we are now behind it; we were in front of Hong Kong and Singapore, but we are now behind them. Under the Government, we have slipped from 13th to 18th. Last year, when the Chancellor said we were in a hole, he should have said that we were in the 18th hole, well behind 17 players. No wonder I regard with some trepidation the statement by the Chancellor some months ago that the task of overtaking our rivals needs the election of more Conservative Governments in the future.

Mr. Gyles Brandreth: The hon. Gentleman mentioned job insecurity and competitiveness. He will be aware that, at the Confederation of British Industry conference last week, Sir Rocco Forte, whose company owns hotels in my constituency, spoke of the devastating effect on the competitiveness of his industry and on jobs of the minimum wage and the social chapter. Given that 16,000 of my constituents work in the hotel, retail and tourist industries, and given that a leading hotelier is saying that those policies would have a devastating effect on employment prospects, how can he continue to support those policies?

Mr. Brown: The hon. Gentleman's speech last week was a little better than the speech that he has attempted today. I would have thought that he and Forte itself would be more concerned about the takeover bid that has been mounted. He asked about the minimum wage. Is he not interested in the fact that, of the 17 countries ahead of Britain in the world prosperity league, 15 of them have minimum wages?
Where do I get the information about how we have slipped down the world prosperity league? [An hon. Member: "A Labour party researcher."] No, not from a Labour party researcher, as the hon. Gentleman said; not from the Trades Union Congress; not from an academic buried in a university. I obtained that information from Her Majesty's Stationery Office, from an official Government publication, a White Paper with all the authority of the Cabinet, entitled "Competitiveness: Forging Ahead".
The White Paper was
presented to Parliament by the President of the Board of Trade and the Chancellor of the Exchequer, the Secretaries of State for Transport, Environment and Employment, the Chancellor of the Duchy of Lancaster, and the Secretaries of State for Scotland, Northern Ireland, Education and Wales".
Half the Cabinet signed that White Paper.
As the Prime Minister said in an admiring introduction to that White Paper, it was
the first comprehensive … survey of Britain's competitive position against that of our leading … rivals … a hard-headed assessment of our competitive position.

Mr. Nigel Forman: For the avoidance of doubt, will the hon. Gentleman tell the House a bit more about those figures? Will he tell the House, for example, whether they are based on purchasing power parities or current exchange rates?

Mr. Brown: Not only can I tell the hon. Gentleman that those figures are based on purchasing power parities, but I can tell him that even the exchange rate measure gives exactly the same answer about the deterioration in our competitive position. I can tell him that the position was the same last year as this year and, according to all surveys that have been done, is likely to be the same in the current full financial year.
It would be worth while for the hon. Gentleman to read the report. Not only have we fallen to 18th in terms of national income per head, but we have fallen to 21st in terms of investment per head—way below Spain and Portugal.
That White Paper says that we have consistently invested a smaller proportion of national income than our competitors, that United Kingdom industrial research and development expenditure is less than that of our competitors, and that all the changes that the Conservatives say that they have brought about in the British economy come down to the fact that we have slipped, under their policies, from 13th to 18th. They should be ashamed of themselves.

Mr. Tim Yeo: Will the hon. Gentleman give way'?

Mr. Brown: I shall give way on the White Paper, which no doubt the hon. Gentleman has read.

Mr. Yeo: Will the hon. Gentleman tell me how many of the 17 countries that are ahead of us devote as large a proportion of gross domestic product to the public sector as we do?

Mr. Brown: The question, as I shall suggest to the House later, is not, "What theoretical proportion is public expenditure of national income?" but, "What is investment as a share of national income?"

Mr. Yeo: What about answering the question?

Mr. Brown: The hon. Gentleman knows perfectly well that in Germany, France and many other countries, public expenditure is a greater proportion of national income, and they are more prosperous than we are. He should also know that, when assessing relative prosperity, most countries would go on the direct connection between investment and gross domestic product per head.
What has happened to the economy after 16 years? Let us remember what was said. Do Conservatives continue to boast of the "economic miracle", as they did in 1988? Remember the boast by the then Chancellor that we had become the envy of Japan, as Japan shoots ahead of us in the economic league. Remember the claim by the present Prime Minister that there was no longer a German economic miracle, but that a British economic miracle had replaced it. Remember the proclamation that the Conservatives had transformed the British economy.
Remember that other promise—indeed, assertion—that the pound was about to replace the deutschmark as the leading European currency, a characteristically prescient statement, made only a few weeks before we crashed out of the exchange rate mechanism. What do Conservative Members say of their economic transformation now that the pound has completed its passage and is worth 40 per cent. of the value of the deutschmark that it was worth in 1979?
There are no more big promises; no more weasel words. The following phrases are found in the speeches of the Prime Minister and the Chancellor now. "Conditions are right," they say; "we are poised"; "the fundamentals are in place"; "we are well placed". Surely, after 16 years being poised on the brink of laying the foundations of the essential preconditions for getting the fundamentals right for being on our way to becoming the enterprise capital of Europe, that is simply not good enough. It is time to judge them on their record, not on their promises.

The Chancellor of the Exchequer (Mr. Kenneth Clarke): The hon. Gentleman makes much of the one page of the White Paper on competitiveness that he appears to have read concerning the list of GDP per head figures, at the top of which comes Luxembourg. The method used to calculate the figures involves the assets of all the secondary banks in Luxembourg, which puts it at the top of the table. But those assets are not enjoyed by all the inhabitants of Luxembourg, and it is not an ideal measure of the most successful economy in the world.
The hon. Gentleman appears to want to make an absurd comparison, to try to prove that the Thatcherite revolution never happened. Is he aware of the analysis in The Wall Street Journal by Mr. Marsden, an independent economic consultant, who uses World bank figures on a number of indicators that have more to do with improvements in our position? It shows that, since 1979–80, out of 16 countries, Britain is first in the list of improvements in productivity, first in reductions of tax burden, first in the increase of private consumption and overwhelmingly first in attracting foreign investment. If the hon. Gentleman studies league tables, he should use sensible ones, not misuse casual ones.

Mr. Brown: The Chancellor now seems to think that an extract xeroxed from The Wall Street Journal is more valuable than a Government publication—a White Paper from HMSO.

Mr. Clarke: rose—

Madam Speaker: Order. I cannot hear two hon. Members at once.

Mr. Brown: Perhaps the Chancellor has another report to which he wants to draw our attention. Perhaps he has an extract from a Japanese daily newspaper.

Mr. Clarke: It is not the way the hon. Gentleman reads them, but the way he tells them. He keeps misusing our White Paper on competitiveness to show it as some sort of world prosperity table. The figures refer to investment, productivity and personal consumption. He knows that the Conservative party has transformed this country for the better since 1979. We are currently well ahead of the league in our recovery from the recession.

Mr. Brown: If the Conservatives have transformed the country, why are 2 million people unemployed? Why is there massive job insecurity throughout the country? Why are we experiencing the slowest surge of investment out of recession at any time this century? Why—in terms of the measures that the Chancellor chooses to use, such as national growth—do we have the lowest non-oil growth of any European country for the past 15 years? The Chancellor thinks that national income per head is not a measure worth using. I thought that he would throw up that subject—he has to create a smokescreen, because at no point has he denied my central figure.
I looked back over the Chancellor's publications and was surprised to find one entitled "Britain in Europe", which spoke of new hope for the regions. Its authors are given as Kenneth Clarke and Elaine Kellett-Bowman—[Laughter.] The Chancellor chooses his co-authors well. I do not know who will take the blame or the responsibility for what I am about to say.
The Chancellor talks of how everyone should benefit and asks what action can be taken to sort out the regions of Europe. He asks how we should measure the difference between the richest and poorest regions and concludes that they are calculated in terms of gross domestic product per capita—exactly the same measure that the Chancellor now doubts when I put it to him.

Mr. Clarke: rose—

Mr. Brown: I shall allow the Chancellor to intervene once more, but this is my speech and I hope that he has a speech to give.

Mr. Clarke: The hon. Gentleman is obviously lost for words for a moment and is obviously searching for policy. I wrote another pamphlet on regional government in this country, which was adopted by the Labour party for a time as its regional policy, but it, like me, has changed its mind and has now dropped the policy. When I wrote that pamphlet—

Dame Elaine Kellett-Bowman: When we wrote it.

Mr. Clarke: When I assisted my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman) to write the pamphlet, when she was a Member of the European Parliament and I was shadow spokesman, we were making unfavourable comparisons of every sort with the rest of the continent. But I was not using those figures as a prosperity league, as the hon. Member for Dunfermline, East (Mr. Brown) keeps calling it. Will he not admit that, throughout the 1980s, we led the French and the Germans on growth, and we beat everyone else on productivity? Living standards have increased by 40 per cent. and the hon. Gentleman would see that we continue to move up any sensible league table if only he would use one.

Mr. Brown: I hope that the Chancellor will be more accurate when he delivers his Budget next Tuesday. His figures about growth comparisons with France and Germany are completely inaccurate. Our non-oil growth rate over the past 15 years is 1.6 per cent; even with oil, it is 1.8 per cent. That is way behind our more successful competitors, particularly Japan, which has a growth rate of more than 3 per cent.
As for the Chancellor's pamphlet on regional government, I know why he wants to disown it, as I am one of the few who has read it. He proposes indicative planning, a national plan, regional plans and regional economic plans. I am not sure that the No Turning Back group and the 92 group would look favourably on any of those proposals.
After four Chancellors, 11 Secretaries of State for Trade and Industry and 17 Queen's Speeches in 16 years, the Government now tell us that they have discovered the answer. They have found the key, as the questioner suggested, to the problems of the British economy. They ask us to look not at Britain—which the Conservatives have governed for the past 16 years—but at Hong Kong and Singapore, where they have not been in government. The Conservatives want us to judge them on their promises for the future and not on their record of the past. Their answer today is a return to their policy of 1979: cut public spending as a share of national income, instead of concentrating on the real task of raising the level of investment in the economy.
Why is current Government spending £80 billion higher in real terms than it was in 1979? Lady Thatcher confirmed that Government policy in 1979. Why is current public spending as a share of national income the same as it was in 1979 when we left office? The Government have not solved the problem of public spending, because they are paying the bills for unemployment, waste, decay and failure. In spite of £100 billion in North sea oil and £120 billion in privatisation proceeds, taxes have risen by the equivalent of 7p in the pound. Why have there been 21 tax increases in the past three years—nearly £1,000 per year for every family in the country?
Yesterday, the Prime Minister told us the reason for the tax rises. He did not admit his failure, but he said:
we did so to protect people who were vulnerable".—[Official Report, 21 November 1995; Vol. 267, c. 456.]
He should tell that to the pensioners and to the weakest and the frailest in the country who suffered the value added tax rises imposed by the Government. The Government did not help the most vulnerable: as is typical of the Conservative party, the tax rises were so unfair that they hurt the most vulnerable the most. It is on that unfairness and that betrayal that the Conservatives will be judged.

Mr. John Townend: The Government have a target to bring public expenditure below 40 per cent. What would be the hon. Gentleman's target if he were Chancellor? Would he bring it below 40 per cent., would he leave it where it is, or would public spending increase?

Mr. Brown: Public expenditure would be below 40 per cent. of gross domestic product if the Government had solved the problems of unemployment, waste and the other bills of economic failure. I will not be lectured by a


Conservative party which promised to cut public spending as a share of national income in 1979, but which saw public expenditure in all but two of the past 16 years rise above 40 per cent.
I admire the honesty of the hon. Member for Bridlington (Mr. Townend). He said that there must be tax cuts in the Budget and he issued a statement announcing how many billions of pounds in cuts he wanted to see. However, he said that, even then, it would not return the Conservatives to their 1992 position. No tax cut that the Chancellor may introduce next Tuesday will undo the damage of income tax rises equivalent to 7p in the pound since 1992.
At the same time as the Government have caused us to fall behind our competitors, the country has slipped back as massive job insecurity has dragged down the economy. Job insecurity in the labour market is now dragging down the housing market. When survey after survey shows that that is the greatest anxiety of British people, what are we told by the President of the Board of Trade? He says that job insecurity is only a state of mind. He says that it is not real, but a figment of the imagination. He says that it is all in the mind.
Let the right hon. Gentleman look no further than his own Back Benches. Do Conservative Members have no worries about their jobs? Is there no fear of redundancy on Conservative Benches? We know that any worries they might have about their jobs are not real and that it is all in the mind, but if the President of the Board of Trade really believes that job insecurity and the fear of unemployment is only a state of mind, how can he explain the extraordinary zeal for travel discovered recently by Conservative Members, particularly those with majorities of less than 10,000, and their willingness to take the advice of Lord Tebbit and get on their bikes, in droves? Surely their worry is nothing more than a state of mind.
Job insecurity is only in the mind, except for the former Chancellor, the right hon. Member for Kingston upon Thames (Mr. Lamont), for whom it is in Kingston upon Thames. It is only in the mind, except for the standard bearer of Essex man, the hon. Member for Basildon (Mr. Amess), for whom it is to be found in Basildon.

Dame Elaine Kellett-Bowman: He is not here.

Mr. Brown: He has gone. He has run away as a result of his failure to hold a seat that Labour will definitely take at the next election because of the policies that we are putting forward. Job insecurity is only in the minds of many Cabinet Ministers, when it is actually to be found in real life.
As people's response to the Queen's Speech shows, Conservative Members now have short-term contracts and, for the first time in 16 years, they are facing the same anxieties as the British people. They should not reject out of hand Labour's proposals for jobs to help the unemployed, as they may need them after the election.

Dame Elaine Kellett-Bowman: Does the hon. Gentleman accept that many Members who are seeking new seats have simply had their boundaries changed, so their seats have disappeared? Whatever Labour Members may say, it is important to make it clear that Members are not running away from existing seats; they are simply moving because their seats no longer exist.

Mr. Brown: It is strange that the chairman of the Conservative party, who has a substantial majority in a seat that remains, is moving to another seat. People may wonder why he is so worried about defending that majority as a result of pressure from the Labour party.

Dame Elaine Kellett-Bowman: Will the hon. Gentleman give way?

Mr. Brown: I would rather give way to the hon. Lady's co-author.

Dame Elaine Kellett-Bowman: On a point of order, Madam Deputy Speaker.

Madam Deputy Speaker (Dame Janet Fookes): Order. It is clear that the hon. Gentleman is not giving way.

Dame Elaine Kellett-Bowman: I am raising a point of order. I was not asking the hon. Gentleman to give way, as I knew that he would not. Is it in order for the hon. Gentleman to mislead the House by pretending that a Member is running away, when his constituency has been cut in two and he is simply taking half of it?

Madam Deputy Speaker: The Chair, perhaps mercifully, is not responsible for the accuracy of Members' remarks.

Mr. Brown: The hon. Gentleman protests too much about the position of the chairman. [Interruption.] I apologise to the hon. Lady.

Dame Elaine Kellett-Bowman: That is sexism.

Mr. Brown: I have apologised to the hon. Lady, and I hope that she will accept my apology.
Is there anything more symbolic of the Conservative party's lurch to the right than the content of the Queen's Speech, which announced legislation to cut help for the homeless, used the full might of the Oxford English Dictionary to redefine exceptional hardship as uniquely severe suffering in order to deprive people of housing benefit, and picked out single parents for further onslaught?
Although the Government really wanted yet another social security cuts Bill for the withdrawal of benefit, they hesitated, not from compassion, but, as the Secretary of State for Social Security said in a leaked memo, because they had no parliamentary majority to get it through. The Government do all those things, while at the same time they do nothing about excesses in the privatised utilities, implementing the Greenbury report in full, reforming capital gains tax to avoid excesses and abuses or dealing with the scandal of National Grid. Instead, day in, day out, the Government pour scorn on the measures that we propose.
Nowhere is the abuse of power clearer and the Government's failure to act in relation to privatised utilities more obvious than in the sale of National Grid, which was announced today—a £5 billion asset from which consumers and taxpayers will get only £1 billion in refunds on their bills. That makes every day the case for imposing a windfall tax. What is to happen to the other £4 billion?
Four National Grid directors have been able in the past few months—since Greenbury—to award themselves huge share options, even before shares were available on


the open market. The Government did nothing. Directors were able to buy and sell shares even before there was a market in shares, and nothing was done. Directors were able to cash in their share options before the share price was set, to the tune of £1.6 million. Again, the Government did nothing. The share price was set by auditors, but cannot be set by the market. Again, the Government have done nothing. Despite more handouts to the directors and special dividends that they voted for themselves, still nothing has been done. Nothing has been done even about the compensation built into the share options.
National Grid's chairman, Mr. David Jefferies, is to retire, but he is to come back three days a week and, with his pension, will earn in total £300,000 a year—as much as he used to earn for working five days a week. How can we believe that decisions are being made in the national or public interest, or even in the interest of the electricity industry, when such powerful people are able to set the terms on which they benefit from demergers and privatisations without recourse to the public?
The half-a-dozen directors of National Grid are answerable only to a dozen regional electricity chiefs—who themselves have not only received a present of shares in National Grid but are reported to have had their tax bills paid, so that they get the full profit from the shares that they are receiving. That is the worst example of a privatisation or demerger. It is worse than the shocking abuses that arose from previous sales—so much so, there has in my view been a lurch to the right in the attitudes of the Conservative party more than that which is acceptable.
From National Grid's report, I have calculated today that the former chief of London Electricity, Mr. Roger Urwin, has done well 10 times over, bringing him an annual income of £1.5 million—and he moved from London Electricity to National Grid in the past few months. When such abuse is tolerated, there can be no doubt that matters have been allowed to get worse since the Greenbury report, not better.
What happened to the Greenbury proposals for legislation to disclose pensions, which I expected to see in the Queen's Speech? The Secretary of State for Trade and Industry said that the Greenbury proposals would be considered, and the Institute of Actuaries examined them and prepared a report. The proposal to legislate was accepted in principle by the Government, to be implemented after the measure was drawn up by the relevant bodies. The Government have not only failed to introduce the new Companies Act necessary, but have been persuading people that there is no need for action in that important area. Why has nothing been done?
The company report for British Gas reveals that the pension contribution for Cedric Brown is £19,000. In fact, his pension is worth £300,000 a year, and it will cost the pension fund an astonishing and budgeted £4 million. Because the Government do not want us, the shareholders or employees to know those facts, nothing is done to insist that the full figures are published. At National Grid, a figure of £8,000 a year is declared—but the pension is worth £160,000, and it could cost £2 million.
There is no evidence that the Government want those figures disclosed to the public, shareholders and employees. [HON. MEMBERS: "Shameful."' As my hon.
Friends say, it is shameful that consultation papers are prepared, promises made and legislation pledged—then the matter is sidelined, with no guarantee that the problem will ever be dealt with under this Government. A few powerful interests in the privatised boardrooms and elsewhere are blocking the full disclosure of pension information—and in yet another lurch to the right, the Conservative party is prepared to go along with it.
The Government want to do nothing and hope that the controversy will go away. Let us examine the Greenbury recommendations and what has happened to them. Two-year rolling contracts were to be outlawed in favour of one-year contracts. Nothing has been done. The utilities were to examine their remuneration and put their house in order, yet small shareholders have still been told nothing. The stock exchange listing changes have been delayed until the end of the year.
As for consultation on long-term incentives and share options, nothing has been done either. The promised review by the utilities to explain their remuneration packages, with a requirement for discussion at the first available annual general meeting, has not materialised. The report of a few days ago showed that only one of 24 utilities had taken steps to implement that recommendation.
What about the share option proposals? It was recommended that no share options should be awarded during the first six months after a privatisation. Nothing has been done about that. It was further recommended that share options should not be awarded at 85 per cent. of their value—nothing has been done. How can the Conservative party tolerate the Prime Minister and Cabinet promising in the summer to take action, but doing nothing by the autumn, even as the abuses continue? The Conservative party has become a faction promoting the interests of the powerful few.
What has happened to one-nation Toryism in Britain? The Conservative party stands by as the main recommendation to prevent exploitation and harassment is removed, in the Queen's Speech, from the housing and homelessness Act. At the same time, the party does nothing while abuses are identified. There was a time when one-nation Toryism controlled a majority in Cabinet. It was once even in control in 10 Downing street—it was even the dominant force among Conservative grassroots. But in the 1980s, one-nation politicians in the Conservative party were reduced to holding fringe meetings and attending the occasional lecture or well-fed dining club—

Mr. Michael Fabricant: It is interesting to hear the hon. Gentleman's discourse on the history of the Conservative party. What we have not yet heard are any tangible Labour party policies, or how the hon. Gentleman intends to pay for any of them.

Mr. Brown: I have just outlined 10 recommendations by Greenbury which the Government have failed to implement or whose implementation they have failed to supervise. We shall not take lectures from the Conservative party, which promises to implement proposals and then, as with Greenbury, fails to do so.
To return to one-nation Conservativism: even the solitary token wet speech traditionally given by Peter Walker to the Tory party conference is no more. At this year's conference the one-nation group could not even,


muster a fringe meeting—they had to make do with a drinks reception. The Macleod society, which was to have been set up in a blaze of glory, could not find a sponsor for its first pamphlet, and is said to have only seven known members.

Mr. Fabricant: On a point of order, Madam Deputy Speaker. It is one thing, perhaps, to comment on what is not in the Queen's Speech; but is it in order to discuss the Conservative party conference in this debate?

Madam Deputy Speaker: That depends entirely on whether it is a passing reference or the mainstay of a speech. I am assuming that it is the former.

Mr. Brown: It is indeed, Madam Deputy Speaker. The hon. Gentleman appears to be somewhat carried away after his appearance in "The Final Cut". Perhaps he is trying to sketch out a scene for a future edition of the programme—but it carries little weight in this place. He would do better to tell me whether he supports the one-nation group or whether he is on the extreme right of the Conservative party.
The country wants to know what has happened to the social conscience of the Conservative party. It used to exist, but it has now almost disappeared—

Mr. Ray Whitney: rose—

Mr. Brown: A one-nation Conservative? I shall take one intervention from a supporter of the chairman of the 1922 committee, and then another from one of his opponent's supporters—I do not know which the hon. Gentleman is.

Mr. Whitney: The hon. Gentleman talks of what the country wants to know. What the country wants to know, and what we have now been waiting to hear for 34 minutes, is the policy of the Labour party.

Mr. Brown: I have been outlining the investment and employment measures, and the action on the privatised utilities—

Mr. Brandreth: Will the hon. Gentleman give way?

Mr. Brown: Does the House think that I am going to give way to the hon. Gentleman—who might do better to spend more time in his constituency, given the narrow majority that he must hold on to? I shall proceed with my speech, and respond to no more interruptions.
A further lurch to the right in the Conservative party relates to taxation policy. We now find that the Prime Minister has set the party a tax objective: the abolition of capital gains tax and inheritance tax. Who are the main beneficiaries of the new proposal? None other than the directors of the privatised water and electricity companies, which stand to gain £40 million each.
The richest 5,000 in the privatised utilities have gained £500 million. Here is an idea that originated with the poll tax and from the No Turning Back group, the 92 group and the Adam Smith Institute. It was peddled on the right of the Conservative party, and then adopted by the Prime Minister for his leadership campaign. Capital taxation has been supported by every Conservative Prime Minister this century, from Bonar Law to Lady Thatcher, because they understood that it was necessary—in particular, to prevent tax avoidance through the declaration of income as capital. Yet the Conservative party has now come up with

a proposal that can benefit only a small number of people, and the Chancellor is having to adopt it as a major objective in taxation policy.

Mr. Tim Devlin: Will the hon. Gentleman give way?

Mr. Brown: I will not give way again.
Abolishing capital gains tax and inheritance tax is now a tax priority. What has happened to the Chancellor—the person who once represented one-nation Conservatism, and who once called himself a one-nation Tory? How has that proposal slipped past him?
The Chancellor has never been a details man—as he confessed after his speech on the Maastricht treaty, which he had never read. Does he now wish that he had been a little more careful with the detail? Does he wish that he had studied it more accurately? Is it not true that a new objective in taxation policy that can reward only the richest has been smuggled through the Treasury?

Sir Peter Tapsell: Will the hon. Gentleman give way?

Mr. Brown: No, I will not.
The whole Budget process has been planned in Conservative central office, just like the Queen's Speech, and directed by the chairman of the Conservative party. The narrowest interests of the Conservative party are to come before the interests of the nation. It is all directed less towards getting the economy right than towards—in the words of the Conservative party chairman—"wrong-footing the Labour party". That is what the right hon. Gentleman said yesterday, when he held a press conference on tax and spending issues.
Even the Chancellor is now forced to admit that this will be "a political Budget". We know that it is not about the needs of the country, but about the needs of the Conservative party. Just as the Chancellor has been bounced into a policy favouring the abolition of capital gains tax and inheritance tax, on Budget day he will be bounced into doing things that he knows are not in the interests of the country.
What shall we see next Tuesday? The door of No. 11 Downing street will swing open; the photographers will step forward for the traditional shots; the Chancellor will appear on the doorstep, looking around for the official Rover that will drive up and from which, eventually, will emerge the chairman of the Conservative party to hand over the red Budget box. The Budget will have been conceived in Conservative central office rather than in the Treasury, but, to be fair to the Chancellor, he will already be well aware of what is in it: the chairman of the Conservative party will have briefed the press on its contents the day before.
So where is the Conservative party now? There is nothing in the Gracious Speech to rebuild our industries. There is nothing to tackle the huge skills gap revealed in the White Paper on competitiveness. There is nothing to bridge the gap between rich and poor in this country, and nothing to rebuild its infrastructure. There is nothing of which the Conservative party can be proud. There is no grand strategy, no broad vision, no new programme.
Even after the Budget next Tuesday, the Conservatives will still be in difficulty, still in the hole that the Chancellor says they are in. Nothing that they can give


away next Tuesday can restore what they have already taken away. Even if they brought down taxes by 2p, 3p or 4p in the pound, the Chancellor would still have to find £6 billion to £10 billion to restore to the taxpayer the equivalent of the 7p in the pound by which he and his colleagues have raised tax since 1992.
That is the Tory strategy to try to win over the people, but a tax cut every five years will never make up for the 21 tax rises in the years in between—tax rises followed by tax cuts. No doubt, if the Conservatives had the chance, the new tax cuts would again be followed by tax rises after the election.
That is all part of a pattern that exposes a short-termist Government, motivated and driven only by electoral calculations, negative in all their campaigning and acting like an Opposition rather than a Government. Next week the Prime Minister will have had five years in power but, as the former Chancellor of the Exchequer, the right hon. Member for Kingston upon Thames, has said, he has been in government, but he has not been making the decisions. There will be no prize of five more years, no street parties and no celebrations.
In 1990, the Prime Minister promised a classless society, opportunity for all and a nation at ease with itself. Instead, under his leadership his party has become a group dominated by extremists who have abandoned the centre in pursuit of unity—a two-nation party when there are no longer two-nation answers to the problems that the country faces.
The Conservatives are a party of the past, huddling round burnt-out ideologies, too weak to face up to the challenges of the next century. As we heard in the Gracious Speech, they are reducing complex problems to the repetition of the simplest and crudest slogans—scapegoating, xenophobic and turning on minorities. They do not care what is left among the ruins.
A divided nation and an unsuccessful economy are too high a price to pay for the last days of the Conservative Government. They are out of touch and their Ministers are out of their depth; they are out of time, and they should be out of office.

The Chancellor of the Exchequer (Mr. Kenneth Clarke): Earlier this week, on a more solemn occasion, the nation was glued to its television sets as a major public figure made important pronouncements: the hon. Member for Dunfermline, East (Mr. Brown) was trying to make an announcement about tax policy. It misfired—yet the author of the 10p tax gimmick has the nerve to accuse me of being "never a details man".
The hon. Gentleman has not mentioned his new idea today. I thought that we might be given a few more details, but apparently the policy that nearly emerged over the past weekend of error has already been withdrawn, and it played no part in the speech of the shadow Chancellor in the House of Commons four days later, a week before the Budget.

Mr. Gordon Brown: rose—

Mr. Clarke: No. I shall give way in a moment, but first I ask the hon. Gentleman to tell us which of his

shadow Cabinet colleagues gave him the strong advice that they wished to hear no more about income tax at lop in the pound.

Mr. Brown: The Chancellor's first two jokes have misfired. Which does he think is fairer—the objective of a 10p starting rate for income tax or the abolition of capital gains tax and inheritance tax? Will he give a truthful answer?

Mr. Clarke: It was not my joke—the 10p in the pound rate was the hon. Gentleman's joke. Perhaps the hon. Gentleman expected me to come back with a 5p in the pound rate, as he appears to want to conduct economic policy in that way. The hon. Gentleman knows perfectly well that it was a bizarre and ill-judged policy, and it is the nearest he has ever got to showing us an inch of detail that we could discuss in the House. That is an abuse.

Mr. Brown: rose—

Mr. Clarke: Will the hon. Gentleman give us a measure? Is there a Labour party tax commitment that he might wish to offer the House?

Mr. Brown: Will the Chancellor answer the question I put to him? I have set down the principles for a modern taxation policy as fairness, encouraging work and opportunity and being honest with the public, none of which is achieved by the modern Conservative party. Which is the fairer—a l0p starting rate for tax to help work opportunities and to reward effort, or the abolition of capital gains tax and inheritance tax?

Mr. Clarke: I believe in the principles of fairness in taxation, and we demonstrate those principles. I believe that taxation should encourage work and enterprise, and I am delighted to hear the Labour party at least pay lip service to the principle of incentive, which has guided the Conservative party's approach to taxation for a long time. We are committed in the long term to the abolition of capital gains tax and inheritance tax. The ex-socialist in the hon. Member for Dunfermline, East has not yet discovered the importance of capital taxation in an enterprise economy. His remarks on capital gains tax go back to the old politics of envy.
The hon. Gentleman's policy of a 10p in the pound rate of income tax is an incredible gimmick, and independent commentators have pointed out that such a rate does not serve the objectives that he said it would. The hon. Gentleman is merely trying to enter into a bidding match outside this House and is aiming below our clear objective of a 20p in the pound basic rate, to which I shall return.
The hon. Gentleman's speech was wholly typical of his approach to these occasions. He insists on having an economic debate less than a week before the Budget, and it is an obvious opportunity for the shadow Chancellor of the Exchequer to come to the House of Commons and give a shadow Budget. But he never does so.
If the hon. Gentleman can praise one-nation Conservatism—which I certainly support—I can praise the Liberal Democrats, although this may never be repeated on the Floor of the House. The Liberal Democrats always set out their proposals on taxation at this time of year, and they say what they would spend that taxation on. They set out their views on interest rates and set out their economic policy. The hon. Member for Dunfermline, East always comes here and gives a rant and he always goes back to a


few of his favourite themes, such as the state of the Conservative party, but he hopes that he will not upset the shadow Foreign Secretary as much as his attempts to say something about economic policy always seem to do. The forced smile of the hon. Gentleman does not conceal the fact that arguments about divided parties do not come too well from that side of the House.
The shadow Chancellor should come to the House and give us a full set of tax plans, spending plans and borrowing plans. But he cannot do that, because the numbers must add up. The hon. Gentleman cannot deliver a shadow Budget, because he does not have the policy components necessary to do so.

Mr. Peter Hain: Will the Chancellor give way?

Mr. Clarke: I will give way to the hon. Gentleman, who I hope will give me a policy on interest rates or inflation. I would also like to know whether he is rising in support of the official Opposition amendment, which was supposedly moved a moment ago by the hon. Member for Dunfermline, East. Does he support the amendment tabled by the right hon. Member for Chesterfield (Mr. Benn) and others, which has some policy in it? That amendment attacks the market economy and goes back to the old values of the Labour movement. I would like to know which amendment the hon. Gentleman supports, and then I want to hear a point of policy.

Mr. Hain: Will the Chancellor give us a clear commitment that, when he is the shadow Chancellor in two years' time, he will deliver a shadow Budget one week before my hon. Friend the Member for Dunfermline, East gives his Budget? Will he promise that that shadow Budget will give marginal tax rates, detailed spending commitments and all the other paraphernalia of the Budget he is demanding from my hon. Friend? Will the Chancellor give a solemn promise to the House this afternoon that he will give a shadow Budget in two years' time?

Mr. Clarke: I have been in opposition, and the Conservative party in opposition had clear economic policies. We most certainly knew what we were attacking the then Government for, as they had reduced this country to being the laughing stock of western Europe in any industrial league table. We put those policies into effect in the 1980s when we transformed this country into an industrial success story. We have clear objectives—

Several hon. Members: rose—

Mr. Clarke: I will not take any interventions for the moment. The hon. Member for Dunfermline, East was generous in giving way, but I do not want to take as long as he did.
We have a clear set of objectives for our economic policies—Government borrowing falling to zero; public spending below 40 per cent. of GDP; inflation below 2.5 per cent.; a basic rate of income tax of 20 per cent. Those are clear and consistent objectives, and we are putting them into place. We are delivering a recovery that will be for keeps and will increase the living standards of families year after year.
The Labour party, after years and years in opposition, does not have a single element of a policy framework that has either been agreed upon by itself or that its Front-Bench Members have ever expounded or set out.

Mr. Malcolm Bruce: The Chancellor has clearly set out his objectives, and has articulated them on a number of occasions. During the debate on the summer economic forecast, he said:
borrowing is actually taxation deferred."—[Official Report, 12 July 1995; Vol. 263, c. 979.]
Does he agree that—against the background of a huge overshoot in current borrowing—any tax cuts in next week's Budget would have to be clawed back after the next election?

Mr. Clarke: I have just set out our policy on borrowing, and one of the reasons for that policy has just been correctly set out by the hon. Gentleman. We are committed to reducing the borrowing balance to zero over the medium term, and that remains our firm commitment. We intend to return to a situation where the ratio of debt to GDP in this country is declining, and that is a policy that my predecessors and I have followed consistently. I have never heard the shadow Chancellor express a clear opinion on that objective, and certainly he did not do so this afternoon.

Several hon. Members: rose—

Mr. Clarke: I shall give way later, or I shall be giving way more frequently than the hon. Member for Dunfermline, East did. I shall give the background against which our policies should be seen, so far as the Budget next Tuesday is concerned.
The economy has been growing steadily for three years. Output in this country is now 6 per cent. above its previous peak in the boom a few years ago.

Mr. Roger Berry: Will the Chancellor give way?

Mr. Clarke: The International Monetary Fund expects Britain to be joint top with Germany in the league table for growth in the seven main industrial countries next year. Unemployment has fallen by more than 700,000 since its peak, and 1 million new jobs have been created since the recovery started.

Mr. Berry: rose—

Mr. Clarke: Some 250,000 of those jobs were created last year alone, and the majority of those new jobs were full-time jobs.

Mr. Berry: Will the Chancellor give way on unemployment?

Madam Deputy Speaker: Order. I shall make it clear that hon. Members must resume their seats if the Chancellor does not give way.

Mr. Clarke: I was about to add that we are enjoying the best run of low inflation for half a century.

Mr. Berry: Will the Chancellor give way?

Mr. Clarke: I shall give way to the hon. Gentleman. I am the Chancellor of the Exchequer in the only country in western Europe that has got unemployment down by 750,000, and the only country in western Europe that has been creating jobs—some 500,000—since the recession, so I will not be shouted at about unemployment by a member of a party that is in favour of a minimum wage and the social chapter, but does not even have the nerve


to say at what level a minimum wage would be, because it knows that we would put a figure on how many jobs the minimum wage would destroy. I shall listen out of courtesy to the hon. Gentleman on unemployment, as he might produce a policy. That would be more than his Front-Bench spokesman has done.

Mr. Berry: I thought that the right hon. and learned Gentleman was the Chancellor of the Exchequer, and not me. If his policies and those of his predecessors have been so effective in tackling unemployment, why has unemployment under the Tories not been less than the level they inherited in any single year since 1979?

Mr. Clarke: We employ a higher—[Interruption.] There have been huge changes in our labour market and those of our international competitors since 1979, and this country has prospered from these changes when compared with the rest of the western world. There are far more people in our work force now than in 1979. We have a higher proportion of our work force in employment than any other major western European economy. [HON. MEMBERS: "That is irrelevant."] It is not irrelevant. We have a lower level of unemployment than either France or Germany. The background is that we alone of the western European economies are creating new full-time jobs. We have a background of falling unemployment.
The Labour party has no policy on the labour market except the social chapter, the minimum wage and a bit of policy about bringing back trade union recognition. Labour Members never speak about it. They give no detail about it. They would not even tell the Labour conference what figure they would put on the minimum wage. They know that the only policies they have on unemployment would drive it up, destroy jobs and put us back in our good performance compared with the rest of western Europe. That is why—

Mr. Berry: Will the Chancellor give way?

Mr. Clarke: No. It is enough. It is one consequence of the rules of the House that, when one gives way, one has the last word. I cannot keep coming back to the same point.

Mr. Berry: It is not my fault.

Mr. Clarke: It is not the hon. Gentleman's fault. It is because Labour Front-Bench Members have nothing to say on unemployment.
The record that I have just described is the reason why an independent body such as the OECD has described our recent economic performance as impressive. I will not give the House all the other favourable adjectives that it has used about the current performance of the British economy. I have no intention of putting any of it at risk. The Labour party does not have the slightest clue what it would do about it if ever the whole thing were put into its hands. I hope that that will always be avoided.
This year, growth in the economy has slowed. That is because I raised interest rates in order to keep inflation down. I did so because rising inflation destroyed the last three recoveries. I increased interest rates early to nip inflation in the bud. That, and my control of public expenditure, allowed me to resist pressure that might otherwise have taken interest rates further.
The approach of the Labour party to public spending control, the tax measures that I had to take, public borrowing in general and all the interest changes that I have ever made or refused to make has been non-existent. There has been no response. The official Opposition, pretending to be a Government in exile, have no views on the struggle that we have made to ensure that the recovery is not jeopardised again by a return to inflation.
We used to have an official Opposition. We used to have a Labour party with socialist policies. We beat it time after time in elections. The Labour party has vacated those policies. Labour Members have turned from those policies to light entertainment in their speeches. They hope that they will get away with that and put themselves in charge of the best and strongest economic recovery in western Europe. Heaven forfend; the future of Britain is far too important for that.
No serious independent forecaster expects the economy to move back into recession. All the signs are that growth will be sustained. A great deal of that will depend on investment. Of course we agree on the importance of investment and improving Britain's investment record. Business surveys suggest that the prospects for investment are good. Good economic conditions stimulate investment.
Manufacturing investment rose by 12 per cent. last year. Consumer spending is on a steady upward path. Rising incomes and employment should keep it that way. We have retained our competitive position in the overseas market. Those are the policies. Those are the results on which the well-being and prosperity of British people and their families depend. Those are the serious matters to which the Labour movement in the House and outside contributes absolutely nothing.
We have heard a great deal about league tables. The Labour party has used the table out of the competitiveness White Paper, to which it has added a little. It has bought advertising space to publicise the table and said that the OECD figures of GDP per head since 1979 are some kind of prosperity league table. GDP per head is open to its difficulties. Is the Labour party going to turn Britain into a secondary banking haven? If so, exactly how does it propose to go about it? Are we going to compare the proportion of oil revenue per head of population to that of Norway? Is that somehow rediscovery of oil? Norway is always one of the countries that the hon. Member for Dunfermline, East cites as having overtaken us.
We have overtaken social democrat countries in Scandinavia which have followed the policies which until recently the Labour party advocated. Of course we have been overtaken by Hong Kong and Singapore, which are small island states in Asia. We should consider our position now in relation to productivity, inward investment and competitiveness in world markets. The hon. Gentleman misuses the tables.
The hon. Gentleman starts with 1979, when we took over an economy racked by debt, recession, strikes and unemployment. For a time in 1981 the United Kingdom's economy dropped to 19th—even in the hon. Gentleman's league table—but that was because of the hon. Gentleman's party's recession, and, even in his table, we have recovered from that recession.

Mr. Gordon Brown: Will the Chancellor give way?

Mr. Clarke: I shall give the hon. Gentleman some fresh figures and then give way.
Let us just examine where we are now. I agree that the measure of purchasing power parities is the way to do it. The United Kingdom's GDP per person is in line with the European Union average. The Central Statistical Office's recent "Business in Europe", another of our glossy publications, shows that, between 1981 and 1993, the United Kingdom's economy grew faster than those of Germany, France, and Italy, and it grew faster than the European Union average. That growth is showing on the ground: there are now 3.5 million active businesses in the United Kingdom, which is 50 per cent. more than there were in 1979. Business numbers are still rising, and business profitability is very high.
The hon. Gentleman referred to nationalised industries. The first thing to say about nationalised industries is that they used to cost the British taxpayer £50 million every week. Privatised companies now contribute about £55 million every week in revenue.

Mr. Alex Salmond: On a point of order, Madam Deputy Speaker. There is some noise in the Chamber. When the Chancellor was speaking about those comparisons, I could not hear whether he took as his starting year 1979, when the Conservatives came into office, or 1981, which was after a very deep recession.

Madam Deputy Speaker: The Chancellor can deal with that himself.

Mr. Clarke: The starting point that is always used by Opposition spokesmen—it is logical to look at when we first came into office—is 1979. In 1979, we took over from a Government who had an enormous amount of public borrowing because of its attempt to reduce taxation. It was an economy in steep decline which, between then and 1981, had to be turned round. Using 1979 as the date pulls down the average figures. Until 1981, the decline that we had been left carried on. The argument is very old, and it is only because those figures have been dug out that I resort to it. We had that argument all the way through the 1980s, and we always won it because people clearly remembered why we had to increase taxes and get borrowing under control when we first came in. They remembered how we got to the 1981 position, for which the comparisons are very different.
Throughout the 1980s, our growth pattern was faster than those of the other European countries I have named.

Mr. Gordon Brown: Will the Chancellor give way?

Mr. Clarke: The hon. Gentleman should listen a little further because he might learn something, perhaps for the next speech.

Mr. Salmond: How on earth can the Chancellor seriously compare the records when he misses out the first two years of an extremely deep recession? If he wants to compare the Government's record against that of other countries or against that of other parties, he should compare it over the whole 16 years; he should not miss out the first two years.

Mr. Clarke: I make it quite clear when I say that, throughout the 1980s, we grew faster than Germany, France and Italy. In his intervention, the hon. Gentleman pretended to mishear what I said, and he said that I was

wrong. He knew perfectly well, however, what I was talking about. He wants to include the first two years after the winter of discontent in order to pull our record down. The winter of discontent was the creation of the Labour party, and it was the achievement of the Conservative party to get us out of it and set ourselves on the way to being the enterprise centre of Europe.

Mr. Gordon Brown: Will the Chancellor therefore confirm that he accepts that we were 13th in national income per head in 1979 and that we are now 18th? Will he also accept that we were 13th in 1974 and 13th in 1979, and that all the decline has happened under a Conservative Government? Will he explain why we have slipped from 13th to 18th under a Conservative Government?

Mr. Clarke: I have already pointed out to him that using GDP per head figures in that way is ridiculous. We published a whole document. The hon. Gentleman has become a monomaniac about one table, which he misuses in order to make his totally specious point. Our inward investment, our consumption, and our personal prosperity have risen throughout the years which, using this one table in a rather eccentric fashion, he claims were years of decline. It is no substitute for policy. We are doing better than the others now and the hon. Member for Dunfermline, East is trying to pretend that he has some hidden secret that might enable him to do better.

Mr. Brown: The right hon. and learned Gentleman now wants to talk about investment. Will he explain why we have fallen to 21st in the investment league since 1979?

Mr. Clarke: I shall give the hon. Gentleman some comparative figures on investment. Let us look at investment in the whole economy [HON. MEMBERS: "From 1979.'] I do not mind responding on the whole period of office. I am one of the last survivors of the long march and I am still here. I even survived a period in opposition to the Labour party, when it had a policy and it was a wrong one—it perhaps was even worse then.
Investment in the whole economy under the last Labour Government grew by a grand total of 1.4 per cent. Since the Conservative Government came to power, investment has grown by 31 per cent. Obviously, we have been in power far longer than the Labour party, so one has to look at the annualised rate of increase—for the hon. Member for Dunfermline, East, this man of detail, that means how much per year. It has been 1.8 per cent. per year under us, as compared with 0.3 per cent. each year under Labour. Investment has grown six times faster under Conservative Government than under the last Labour Government.
Let us look at a few international league tables—

Mr. Brown: rose—

Mr. Clarke: Let me give the hon. Gentleman just one more figure from the Organisation for Economic Co-operation and Development on increased investment—[Interruption.] I have dealt with unemployment and now we are on to investment, which was the next point that the hon. Gentleman laboured.
Judging from the annualised rate for the increase in investment between 1979 and 1994, we have moved to the top of the investment league for major economies in Europe. I just gave the annualised rate for the United


Kingdom, which was 1.8 per cent. but in France it was 1.2 per cent., in Germany it was 1.1 per cent. and in Italy, 0.7 per cent. We have outstripped those countries, although they all did a great deal better than Britain ever did under a Labour Government. We are top of the table; we are not bottom any more.
The prospects for future investment, which is what matters—[Interruption.] That is what we are tackling in the Budget and that is what the hon. Member for Dunfermline, East will have to talk about next week—the prospects for future investment. Most forecasters share the Treasury expectation that investment will pick up strongly this year. The signs of investment growth are there. Manufacturing investment is, as I said, up 12 per cent. on a year ago. Business surveys all show that prospects for investment remain healthy and the Confederation of British Industry investment intentions balance remains buoyant.
All that investment record—the strong record now—shows that we are making progress towards our goal. It is one of the reasons why the British economy has been growing faster than the G7 average for the past three years. If we are looking at league tables, the International Monetary Fund expects the United Kingdom to be joint top with Germany of the seven top economies—the G7 growth league table—in 1996. That is because of the success of our policies, to which the hon. Member for Dunfermline, East presents not the slightest alternative.

Mr. Roy Beggs: Does the Chancellor agree that Government policies have largely contributed to the success that Northern Ireland now enjoys in attracting inward investment? Does he further agree that the location of that investment is best left to individual companies to decide rather than being subject to the direction of officials?

Mr. Clarke: Yes, I entirely agree and I am absolutely delighted that the Northern Ireland economy is performing so strongly. As part of the United Kingdom, it is quite rightly benefiting from the success of British economic policy and of our success in making this country the most attractive location for inward investment in western Europe.
I can set out a policy, although I am in Budget purdah. The hon. Member for Dunfermline, East knows that he has the advantage of me on this occasion, or he ought to have, because I cannot give specific measures beyond that. With no purdah, he produces nothing. The veil remains tightly drawn and nothing is believed. Every time he comes to the House on occasions when he ought to be saying what he would do if he was given stewardship of the national economy, he ought to answer our questions—the questions that i always ask.
Does he think that public borrowing is too high, too low or about right? Does he believe that we are controlling public spending too much or too little, and would he control it more firmly to achieve his incredible 10p rate? I have asked him questions, but he retreats into the childish obfuscations, "We will wait to see what the economy will be like. We will await the full information."
As is obvious from the folders that the hon. Member for Dunfermline, East clutches when he comes to the Chamber to speak, we shower him with information. We

have a Red Book of the Budget. Would a Labour Government put out a different Red Book? What on earth would be added to the knowledge of the British economy by a Labour Government, if they ever came to power? What about the statistics from the Central Statistical Office? We have put it aside; it is a totally independent agency. What statistics does he want it to produce to enable him to form some judgments on these vital matters?
It is not that the hon. Member for Dunfermline, East is waiting to see the books, or that he does not know anything about the British economy. Every other financial commentator in the country bombards me with advice on what to do in the run-up to a Budget. Everyone I meet in the Rose and Crown tells me what he or she wants me to do in the Budget. The hon. Gentleman is the only man with no advice and no opinions—the only man in this country who thinks that talking about politics and economics is not allowed in polite company. He is shadow Chancellor and he has no opinions on any of those matters.
At the last election, Labour stood on a policy. The party had a policy of increasing taxation and public expenditure. It was set out with clarity. There was a shadow Budget and there were no excuses then. Labour was a tax-and-spend party. We stood on a platform of aiming for lower taxation and cutting taxes—[Interruption.] Both policies were obviously based on the mistaken belief that the recession was about to end. Faced with £50 billion of borrowing, we acted in the national interest. We raised taxation and controlled public spending. In every sensible step we took, we were opposed by the Labour party.
Had Labour won the last election, what would it have done? Yes, a Labour Government would have raised taxation because they would have raised public spending, which is what they committed themselves to. They would have increased taxation more and more because they would have discovered that they had to tackle that borrowing.
Since that time, we have consistently set out our aims—our low taxation agenda, our desire to get borrowing down to zero and our desire for recovery. The Labour party—the all-tax-and-spend party, which it still is—has relapsed into silence.

Mr. Geoffrey Robinson: The Chancellor must be aware that, just before the last election, the Government knew that the public sector borrowing requirement would go up to £50 billion.

Mr. Clarke: No.

Mr. Robinson: Of course the Government knew that. Given that set of circumstances, how could they have gone into the election with the promises that they made at the time?

Mr. Clarke: If the hon. Gentleman thinks that all economic forecasting is spot on like that, so that Governments always know what is going to happen, he is making the job of Chancellor of the Exchequer sound a lot easier than I have discovered that it usually is. At the last election, all the parties plainly proceeded on the basis that we were out of the recession. We reacted in the public interest and the Labour party reacted by going into a burrow, from which it never emerges with any policy.
We know that tax and spend has not been abandoned. In one week last month in speeches in the House, 40 per cent. of Labour Members called for more public spending. Nearly half the interventions from the Labour party around this silent trappist monk who speaks on economic policy are to demand more public spending. The silence of the hon. Member for Dunfermline, East merely leaves him exposed to all the pressures in his party. It is no good him pretending to be a better one-nation Conservative than I am. I was there first and I know my way around this course much better than he does. He is no one-nation Conservative—he is not a shadow Chancellor of the Exchequer at all.
Let us have a look at what some members of the hon. Gentleman's party say about his pronouncements. The right hon. Member—I am sorry, I am premature, the hon. Member—for Hackney, North and Stoke Newington (Ms Abbott) used these words early this week when she heard of something that struck into her soul so that she felt she had to respond to the hon. Member for Dunfermline, East; I think it was the 10p promise but it might have been workfare for young people. On the air, she said:
Gordon can say anything he likes if he thinks it is going to win the election. But ordinary Labour party supporters in this country, particularly the poor and the unemployed, when Labour is in power will be looking for other priorities from tax cuts.
What about the TUC general secretary, John Monk, a man for whom I have considerable admiration? He said:
Rather than tax cuts, the emphasis should be to increase spending on areas that need it.
We have had enough of this stupid bidding match where the hon. Member for Dunfermline, East tries to emerge from his silence to claim that he is likely to cut taxes more than a Conservative Chancellor is likely to cut taxes—complete nonsense and quite incredible unless he gives us some policy.
It is not an impossible question, on the eve of a Budget, to ask the Labour party what it thinks the basic rate of tax should be. It does not know whether I am going to change it or what my views are, but it presumably knows what the basic rate of tax should be. Obviously, it will raise the higher rates of tax. It must know about that and have some ambition. To what is it going to raise the higher rates of tax?
Will anybody tell us what is the policy of the Labour party? Is there any Labour Member prepared to get up and say on this key issue, a week before a Budget, what the policy of the Labour party on this issue and what the basic rate of tax should be? Are interest rates too high or are they too low? What inflation target should be set? Is there any member of the Labour movement, from the left, right or middle or from the shadow Treasury team, who has the slightest view on that simple matter? This is a total farce. [Interruption.] Oh, we have a figure.

Mr. Fabricant: Does my right hon. and learned Friend realise that the reason why Labour Members cannot answer is that the shadow Chancellor's puppet master, the hon. Member for Hartlepool (Mr. Mandelson), is not in his place?

Mr. Clarke: I think that that is probably right. The hon. Member for Hartlepool came up with what he thought was a remedy for the Labour party: "Let's stop having these policies, leave the rest to me, shouting over the telephone to BBC producers." That is no basis on which any

political party should ever aspire to government in a modern state. [Interruption.] I will not go back to the questions that I have already answered.
On the key things on which Labour has a policy that it will not withdraw—the minimum wage and the social chapter—no detail is given or referred to, but they would be destructive of our competitive position. Everybody knows that I am pro-European, but I am vehemently against ever accepting the social chapter in this country, and vehemently against setting a minimum wage. All the talk of the hon. Member for Dunfermline, East about moving from dependency into work—it was the theme of my Budget last year when I worked on family credit; he has stolen it from me—is made nonsense of by his talk on the minimum wage, as my hon. Friend the Member for City of Chester (Mr. Brandreth) made clear in his intervention.
Let me remind the House of what Adair Turner, the director general of the CBI, said on 15 November. This is the view of British industry and business. He said:
We do not agree at all on the Social Chapter and the minimum wage. We fear that the European Union and Social Chapter would force us to sign a blank cheque to cover the huge raft of workers rights it promises.
He went on:
Mr. Blair claimed he would not sign up wholesale to everything in it. He may believe he does not want everything the EU wants. But because of this structure there are some things he won't be able to avoid.
I am accused by the shadow Chancellor of not having read the Maastricht treaty. I can find my way around the Maastricht treaty a whole better than most people in the House, and as well as any. The Leader of the Opposition made it quite clear that he had not got the first idea about the social chapter and did not realise that he would not be able to pick and choose on the things that were introduced by a qualified majority vote.
This debate is occupied by the Labour party with no economic policy or plans at all, but a large number of threats loom in the background from some of its supporters and interests, and its record of incompetence in power in the past. It is no good saying to the hon. Member for Dunfermline, East, "Where's the beef?", to use the old phrase; he does not even produce a skinny kebab by way of policy when he comes to the House.
I will come to the House next Tuesday free of purdah and present the Government's detailed economic policies for next year. They will be guided by the clear, consistent principles that I have set out ever since I have been Chancellor of the Exchequer. They will be dedicated to making this country the enterprise centre of Europe, an economy that can earn the wealth in which all the people can share and which will pay for the public services about which they care.
We are on our way to out-performing the rest of Europe. We have recovered from the disaster of the 1970s. The 1990s are going to see this country at the head of every economic league table that matters if we stick to the course on which we are set.

Mr. Tony Senn: I was elected 45 years ago next week in succession to a Chancellor of the Exchequer. I have heard many Chancellors of the Exchequer since, some of them eminently forgettable. I think that we may have heard another.
One thing that has not impressed people over the years is the selective use of statistics and selective quotations. People are not entirely and solely economic animals with a Treasury mode of thinking. Even if tonight, as he will, the Chancellor carries a majority in the House, he has not carried the British public on the policies that he has pursued. That is not only because of the so-called competence or incompetence of the Government; it is because the objectives of the Government are not shared by the generality of the British people.
My hon. Friends and I have put down an amendment to the humble Address, which though not called—I cannot complain about that—it is in order for me to read into the record. It states:
But humbly regret that the Gracious Speech made no reference to the injustice and suffering caused by policies based upon the supremacy of market forces in the United Kingdom and world-wide, which have had the effect of elevating profit above the satisfaction of human need, widening the gap between rich and poor, causing mass unemployment and homelessness, starving industry of the investment it requires, harming the public utilities and the social infrastructure, eroding the Welfare State and universal benefits, neglecting essential public services in health and education, denying adequate pensions necessary for retired people, diminishing local authority and trade union rights, producing widespread personal insecurity and fear, creating social tensions and increasing the risk of conflict, encouraging the spread of racialism and intolerance, inflicting damage on the environment, undermining the democratic process and civil liberties and spreading disillusionment, pessimism and cynicism, all of which are features of global capitalism; and calls for the adoption of modern, democratic and socialist policies designed to secure the full use of all Britain's human and physical resources, and their fair distribution, for the benefit of the nation as a whole.
It is by their objectives that Governments are judged. During wartime, victory is the only test. Nobody talks about inflation in wartime, only of defeating the enemy—killing the enemy. When I was first elected—and I am proud of it—the objectives that I have read out were widely shared by both sides of the House. After all, Winston Churchill had been an old Liberal. He had himself nationalised British Petroleum when he was First Lord of the Admiralty. He introduced the Sunday shopping rule and the wages councils. Since 1950, the centre of British politics has altered radically to the right.
We see the consequences in the opinion polls. I do not have a great deal of time for opinion polling. I have no time for political images. The image that I have is the one that I use to shave in the mornings. I cannot change it. However, the Chancellor would be foolish to believe that one can run a society on the basis that profit is more important than human factors.
My right hon. Friend the Leader of the Opposition, speaking in the House in June after the Halifax summit, said:
is not the central issue the revolution in the globalisation of the financial and currency markets, which now wield massive speculative power over Governments of all countries and have the capacity seriously to disrupt economic progress?"—[Official Report, 19 June 1995; Vol. 262, c. 23.]
The Chancellor of the Exchequer has no real control over what should happen in Britain because he has to satisfy the international markets that his policies will not interfere with their objective of the maximisation of profit. That is the function of a Chancellor of the Exchequer and if, by

any chance, we were foolish enough to adopt a single currency, so that his job moved to Frankfurt, not only would those factors determine British policy, as they now do, and what we are allowed to do, but the power of the law would be in the Frankfurt bank rather than in the Treasury.
I, and people whom I meet when I go round the country, ask ourselves what the real cause of the problem is. Is it an incompetent and unfair Government? That is an easy thing for an Opposition Member to say. I believe, however, that there is something much deeper. If the House is in disrepute at the moment, it is not just because of sleaze and all the arguments, but because we in the House do not address the central questions that have to be addressed if we are to provide a decent society.

Mr. Matthew Carrington: Will the right hon. Gentleman give way?

Mr. Benn: I do not intend to be provocative. I hope to be thoughtful, and not to say anything that will bring a Conservative Member to his feet with a quotation that he might think will embarrass me. That is not the sort of speech I want to make.

Mr. Carrington: I was not going to quote.

Mr. Benn: I do not want to give way at the moment.
The county of Derbyshire, which I have the honour, in part, to represent, needs £100 million for school repairs. Derbyshire, like all local authorities, has been strangled by the Government. Local democracy—this matters to Conservative as well as to Labour councillors—has been absolutely strangled. In the 19th century, long before the Labour party was formed, Joe Chamberlain in Birmingham introduced municipal housing, municipal hospitals, municipal water, municipal gas and municipal museums. When I was an RAF trainee, I learned to fly at the Birmingham municipal airport. That was the heyday of local government, which has been absolutely destroyed by the Government's policies.
Let us look at health. I and the right hon. Member for Old Bexley and Sidcup (Sir E. Heath) are the last remaining Members who sat in the House when Anuerin Bevan was Minister of Health. Anyone who looks at what we were able to start in 1948, when we were bankrupt after the war, will see that there was absolutely free health care when we needed it. It has never, of course, been a free health service. It was free when we needed it, but we paid for it when we were well. That health service has been utterly destroyed. The increases in prescription charges have been so high that prescription charges can even exceed the cost of the drugs if bought in a chemist's shop without a prescription—if that is possible. There are long waiting lists and services are being privatised.
I expect that the House has heard of the little document, which is circulating, about the boat race between the NHS and a Japanese crew. Both sides tried hard to do well, but the Japanese won by a mile. The NHS was very discouraged and set up a consultancy. The consultancy came to the conclusion that the Japanese had eight people rowing and one steering, whereas the NHS had eight people steering and one rowing. The NHS appointed people to look at the problem and decided to reorganise the structure of the team so that there were three steering managers, three assistant steering managers and a director of steering services, and an incentive was offered to the


rower to row harder. When the NHS lost a second race, it laid off the rower for poor performance and sold the boat. It gave the money it got from selling the boat to provide higher than average pay awards for the director of steering services. That is what is happening all over the place. There is masses of bureaucracy in the health service and a denial of what people need.
The people who will have to pay for all this are the people for whom the welfare state was devised. I have been searching for the origins of the Secretary of State for Social Security's new proposals for dealing with welfare. I found them because, after 30 years, Government papers are published. The stationery office has just put on a CD-ROM all the papers for 1964. I give the Chancellor this quotation from his colleague. This is the Conservative Chief Whip, Martin Redmayne, sending a minute to the Prime Minister on 19 June 1964. The Conservative Chief Whip said:
The first essentials are to accept that the benefits of the Welfare State should not be universally received and secondly, the insurance principle, which is already eroded, is not sacrosanct. In this connection I would like to see all above a certain income level excluded from benefits.
The Conservative Prime Minister, Alec Douglas-Home, wrote in his own hand—I have a photocopy of this:
Beveridge was very costly. Would another inquiry be as bad or if we win, should we not impose our own scheme?
It was only the defeat of the Conservatives in 1964 that prevented the welfare state from being dismantled then. It is now the present Government's intention to dismantle it.
We then come to the arguments that are put forward when people say that things are unfair and when they protest. One argument is, "You have no rights without responsibilities." That is a very popular phrase nowadays. I looked at the origin of that phrase and found that those very words are in the Brezhnev constitution in the Soviet Union in 1977. An authoritarian system is being introduced, through the Criminal Justice and Public Order Act 1994 and so on, which aims to repress the dissent against policies that are manifestly unfair.
The Chancellor questioned us—that was fair enough—on what the Opposition would do in power. As a candidate, taxation is not an issue that has ever embarrassed me. There are two questions about taxation that ought to be asked: "What is it for?" and, "Who pays for it?" If we tax old-age pensioners by imposing VAT on their fuel to buy a Trident, that is wrong. If we tax people who are better off to fund a proper health service, that is right. The Chancellor, who is a member of the Government, has given 50 billion quid away to the richest 10 per cent. Every family of four—I had the figures broken down for me by the House of Commons Library—spends 40 quid a week on weapons, 40 quid a week paying for unemployment, which is a deliberate policy, 40 quid a week on law and order, much of it caused by mass unemployment, and 20 quid a week on the common agricultural policy.
The Government should not tell us that money is not available for the things that need to be done. Of course it is available, but it involves recasting the priorities to bring the nation's resources fully into use. That should be the objective of government. The Government should see that there is no waste of human resources when so much has to be done. In wartime, as I mentioned, market forces did not prevail. The weapons were provided by the

Government. If we could have full employment to kill people, why can we not have full employment now? Why cannot we use unemployed building workers to build the houses that we need? Why cannot we recruit the nurses and teachers we need? Why cannot we have the people who are needed to look after the old? Why not? Because it is not profitable.
The core of the Chancellor's argument is that profitability should be the test of everything that we do. I utterly reject that. The Government use the word "customers". Someone who does not have any money is not a customer and that is why the Government have invented this use of the word "customer". The homeless in cardboard boxes are not customers because they cannot afford a house, so they can be disregarded.
The Government talk about competitiveness as if everything was competitive. Most things that matter in life are not profitable. Schools are not profitable, hospitals are not profitable, the police are not profitable, the Army is not profitable and the Chancellor is not profitable, but the nation knows that it requires those services to survive. We must get on—I do not say get back—to the position where the employment of all people is a national objective. The health of the nation is a national objective and we should ensure that we develop policies for that purpose.
I know that I speak at a time when left-wing views are supposed to be out of date. My own assessment is simple. It is not just socialism that market forces have attempted to destroy, but Parliament, democracy and the social fabric. The House should not think that the situation will remain like that. We need only look at the defeat of Lech Walesa, or what has happened in Russia. Look at the defeat of the right-wing leader of the German SPD. The people are now gaining a new perception of what they want in the 21st century. They want fairness, and they want to use the resources of their own countries for the benefit of their own people for the short span during which we live on the earth.
Debates of that character would be more interesting and relevant to people outside than what passes for an exchange of management expertise. We in this House are not, dare I say it, managers. We are representatives. Who represents the unemployed? Who represents the old who have been denied a pension related to average income? Who represents the kids who cannot get work when they leave school? Who represents the women who get married and cannot get a home? Who represents the people waiting for hip operations? They look to us to represent them in Parliament.
I am proud to be in a party with a strong trade union base because those trade unions, having won the vote, knew they needed to have representation for working people in Parliament. The reason I am a dedicated socialist, and get more so, is that I know that any party that adheres to a market economy or profit as its prime objective will never solve the problems that confront my constituents.
Although the Chancellor had fun in his speech, and I am sure that he felt that he had done well, the country cannot be run by disregarding human need and putting the almighty pound, dollar, deutschmark or ecu above people. Debates in the House about the economy should relate more to people and less to what we heard from the Chancellor today.

Sir Terence Higgins: I am rather surprised that the shadow Chancellor is not still in his place, because there has been a long convention in the House that, after one has spoken, one remains at least for the next two speeches. It is a great shame that the hon. Member for Dunfermline, East (Mr. Brown) did not do so, because he would have been able to hear the right hon. Member for Chesterfield (Mr. Benn), and that would have given the hon. Gentleman some idea of the problems that he will face if he really thinks that in future the Labour party will become a party of low taxation and low public expenditure.
We could not have had a clearer indication of the way in which the Labour party—and it would be true if it were in government—is still a party that believes in high public expenditure and high taxation than the speech of the right hon. Member for Chesterfield. No amount of change by the shadow Chancellor will convince people otherwise. Such economic thinking is still deeply ingrained in the Labour party, as the right hon. Member for Chesterfield clearly demonstrated.
I am bound to say that this is the third occasion on which we have begun a parliamentary Session with an unsatisfactory timetable ahead of us. We have spent a number of days debating the Queen's Speech. We will then spend a number of days next week and the week after discussing the Budget. Before we know where we are, it will he Christmas. It is no longer possible under the current legislative process to have Second Readings of Bills, which could then go into Standing Committee and make progress, before Christmas.
What is even more surprising is that, ever since the change in the legislative programme, the Opposition have repeatedly insisted on debating the economy during consideration of the Queen's Speech—the week before the Budget. The shadow Chancellor is coming up for his third Budget and, by now, I should have thought that he had realised that that strategy is a mistake. As my right hon. and learned Friend the Chancellor has pointed out, today's debate gives the Opposition a marvellous opportunity to put forward their policies ahead of those of the Chancellor, who is severely handicapped by being in purdah. But what happens? Year after year, the shadow Chancellor has totally failed to produce any policies, except for one this year on lop tax, which I shall discuss later.
Although I have been somewhat persuaded by the Chancellor's view that a unified Budget helps the Government by focusing Ministers' ideas on the relationship between taxation and public expenditure, I am far from clear which way round that relationship operates. Does taxation determine the expenditure, or expenditure the taxation? As for the House, the Budget has not become a unified one, because for well-known reasons we still do not have the power to increase public expenditure or taxation. We can only reduce one or the other, or both, so we cannot exercise a choice. We cannot have a truly unified Budget in the sense that the House can trade expenditure and taxation against one another.
I am somewhat persuaded, however, by my right hon. and learned Friend's view that a unified Budget at least concentrates the mind of Ministers. Although we have only the same amount of time to discuss expenditure and taxation, we can take a view on both according to the

events of next week. I want to defer my remarks on that until next week, which is the appropriate time to discuss the major issues of macro-economic policy.
If it is intended that the Budget should deal with public expenditure and taxation, I hope that my right hon. and learned Friend the Chancellor, and the Leader of the House, who will reply to the debate, will consider whether the Budget should be produced in the spring. I know that that would require a radical change in the Government's internal workings, but it would be vastly preferable from a parliamentary point of view.
Since I do not believe that this is the appropriate moment to discuss macro-economic policies, I merely want to refer to two specific issues, not least because they are of great concern to my constituents. The Gracious Speech referred to legislation being brought again before the House regarding the high speed rail link. That raises the question of compensation for those who are affected by such programmes. The high speed rail link will not affect Worthing, but it is important to consider compensation for those blighted by road programmes in my constituency.
The Chancellor is aware that that issue of economic policy potentially involves huge sums of money, but we are not giving members of the electorate a fair deal. I am strongly of the opinion that we are getting our road and rail infrastructure on the cheap and at the expense of those who happen to be in the way of a particular scheme.
A number of ombudsmen reports have been written about compensation to be paid in my constituency, where there has been a great deal of blight along the route of the A27. The Government have also lost a court case relating to compensation. I had hoped that those facts would provoke them to include in the Gracious Speech better and fairer proposals to compensate people affected by blight, not least that caused by rail projects. To my disappointment, instead of introducing new legislation to overcome the problem, which we could have debated and, if necessary, amended, the Department of Transport, no doubt aided and abetted by the Treasury, issued new guidelines for compensating people affected by blight.
The court case led one to believe that those who had been affected by a road or rail scheme would get compensation if the benefit they had gained from ownership of property was seriously compromised. One imagined that that compensation would relate to loss in the value of the property. That has not happened. In addition to making it clear that a reduction in the value must be apparent, the new guidelines still retain the old noise criterion. That means that the Department of Transport is saying that one must meet that old criterion on noise apart from that relating to reduction in the value of the property.
That is a serious issue. When we come to consider the matter in detail in relation to public expenditure, I very much hope that the Government will consider the implications. I am glad to see that the Chief Secretary to the Treasury is present. I recognise that even in my constituency the sums involved could run into tens of millions of pounds or even hundreds of millions. As for the rail link mentioned in the Queen's Speech, the sums involved could run to hundreds and hundreds of millions of pounds. It is still true, however, that the community as a whole is getting such infrastructure schemes without adequately compensating people who suffer because their homes happen to be in the line of a proposed route.
No doubt the Budget will contain proposals for changes in public expenditure. We have suffered from a number of rumours in the press about cuts in the road programme or other projects. That causes great distress to those who are expecting to benefit from a bypass or some other project.
We all acknowledge that the Government are likely to give priority to education or the national health service. It is common ground that those sectors need to receive priority. However, if there are to be cuts in other sectors, such as in transport infrastructure, it is tremendously important that full consideration be given so that we avoid wasting public expenditure that has already been incurred.
In a specific example that I can think of, we have already expended more than £6 million. It would be foolish if, in such cases, one were to stop the operation dead in its tracks, causing that money to be wasted.
Similarly, it is important that the Government consider the effect on expectations of sudden changes in public expenditure programmes. For that reason also I am glad that my right hon. Friend the Chief Secretary to the Treasury is in the Chamber. It is important that the Treasury, in dealing with other Government Departments, should take into account the human impact—the Treasury, of course, is always very concerned with humanitarian issues—of rapid changes in public expenditure programmes.
My right hon. and learned Friend the Chancellor of the Exchequer has discussed the proposal that suddenly emerged from the shadow Chancellor, before the publication of the Sunday newspapers, for an introductory lower rate of 10p in the pound for income tax. That is an extraordinary proposal.
Sub-editors wrote marvellous headlines in the Sunday paper: "Labour goes for lop rate of income tax without any regard at all for where it is coming from". That is not true. This time we were told where it was coming from. With all previous promises of that type by the Labour party, we were never told where the money was coming from. This time the shadow Chancellor said that it would come from economic growth.
If I may misquote Mrs. Beeton, first get your growth. Post-war history is littered—my goodness, the right hon. Member for Chesterfield knows enough about that—with promises that the Labour party has made in the expectation that there will be growth. One must get the growth first and then decide what to do with it.
Even if the Labour party had got the growth, is a lop introductory rate a sensible way to proceed? It would be more complicated administratively—especially now, because we are adopting a system of tax self-assessment—and that would be a waste of resources. Surely it would be better to lift the threshold and help people at the bottom of the scale.
This is an extraordinary gimmick. Totally impartial organisations such as the Institute for Fiscal Studies have said that it was an extraordinary thing to say. It reflects the shadow Chancellor's lack of judgment in those matters. He has, if I may phrase it that way, no feel for matters economic. That is a serious handicap—one that would cause anxiety if we believed that there was any prospect of his undertaking the job that he now shadows.
As my right hon. and learned Friend the Chancellor said, we heard nothing about what Labour policies will be. If the shadow Chancellor wants to hold this debate

ahead of the Budget, surely he should tell us about that. He gave us no assessment. We are constantly told that he is having a battle with his shadow Cabinet colleagues about public expenditure, but we are given no sign of what his priorities in public expenditure are, and no explanation for his belief that there should be a 10p introductory rate of income tax.
The shadow Chancellor tells us nothing about how wide the band will be. If there is to be a lop rate of income tax for income of up to £60,000 a year, it would be of interest; but it was a 10p rate of income tax divorced from any band. For all that we know, it was a lop rate of income tax on the first £1. We were given no sign. That is a literally unbelievably superficial view of the way in which one should propose economic policy. It should therefore be treated in the way that it deserves.
The Leader of the House will reply to the debate. I hope that he may say a little about the parliamentary timetable. I find incredible the way in which he has stood up to the events of recent months, chairing the Select Committee on Standards in Public Life and the Privileges Committee, involved in public expenditure decisions, standing in until recently for the Prime Minister, as well as being Leader of the House, and now replying to the Queen's Speech debate.
The Queen's Speech includes several extremely worthwhile measures, which I am happy to welcome. I hope that the Chancellor of the Exchequer, in the Budget that he introduces next week, will be able, outside the purdah that inhibited him this afternoon, to propose a positive policy that will have excellent prospects with regard to taxation and public expenditure.

Mr. Malcolm Bruce: The right hon. Member for Worthing (Sir T. Higgins) is right to warn about the dangers of basing spending proposals on future growth, but I hope that he would acknowledge that the same must apply to the Conservative Government, and that the Chancellor should not be talking—he is not yet talking—about tax cuts until he has achieved his objectives on the finances. I shall return to that subject later.
The right hon. Member for Chesterfield (Mr. Benn) also took us to an argument. Of course there is an argument about what overall taxation should be, but there is a legitimate and proper argument, within that framework, about the priorities that divide the parties. It is very unfortunate that sometimes our debates do not allow that argument to take place, and that only the absolutes, in terms of financial framework, are discussed.
The present debate may be regarded in future as historic. We are reaching the end of a Government who are further behind in the opinion polls than any Government have ever been and secured re-election. We might be holding the last debate on a Tory Queen's Speech, and in that context it might be the last chance to determine the extent to which the Government have performed on economic policy on their own terms.
It may be worth reminding the House that, since the Conservatives came to power in 1979, boasts have been made throughout successive Parliaments, by successive Ministers, that we are in a new era for Britain—that an economic miracle has been wrought, with higher growth


and lower taxes. In fact, 16 years on, in most material ways, nothing has fundamentally changed and the Government have failed to deliver on all those promises.
It is not that nothing has changed. I am happy to acknowledge that, within the balance sheet, some good things have happened. The reform of the trade unions is especially important, may be long lasting and was actively supported by Liberal Democrats and our predecessors.
The recognition, which was not heard in the speech of the right hon. Member for Chesterfield, that one does not get something for nothing and one must operate in a disciplined budget framework and take account of market forces, is correct. The Government have acknowledged that one must have a policy about balancing the budget in the medium term, although it is interesting to note that the Chancellor has changed his language on that. His object used to be to balance the budget in the medium term. Now it is to get the budget towards balance in the medium term—a more relaxed attitude at this stage of the Parliament.
Having acknowledged that there are some achievements, it is worth recording the scale of the failure. Taxes under the present Government are greater than they were under Denis Healey, for all the talk about tax cuts. Growth has been, on average, about 2 per cent.—currently 1.6 per cent.—manufacturing output continues to be less than it was in 1979, and investment as a percentage of gross domestic product is the lowest on record. Unemployment is more than double what it was when the Conservatives came to power and has remained at that level. It is generally recognised that our education system and training standards are poorer than those of most of our competitors.
There is therefore no economic miracle, and it is interesting that Ministers no longer speak about it in the way that they did even a few months ago.
Manufacturing production growth is Zero per cent. and unemployment is 2.2 million and static. A very critical fact is that the public sector borrowing requirement is heading for a 50 per cent. overshoot on the current year.
Liberal Democrats have targets on those issues and publish them, unlike the Labour party, so we feel that we may with some legitimacy make a constructive critique of the Government's performance.
Retail price inflation is 2.9 per cent. It is greater than the 2.5 per cent. target that the Government set themselves for the present Parliament, and the Bank of England is sure that there is little or no chance of the Government achieving their forecast. Investment is low.
I had a meeting last week with the German chamber of trade in London. Its representatives said that the extraordinary thing about investment in the British economy was that it was appreciated by foreigners—the Government were constantly boasting about levels of inward investment—but they did not understand why there was such low investment by British-based investors. I ventured to say that perhaps British investors knew the British Government better than foreign ones and had less confidence in their ability to deliver policy in the long term.
There has been a devaluation under this Government, but its benefits are clearly waning, as this week's balance of payments figures demonstrated—they were the worst

ever. Ministers had boasted abroad about a strong recovery—an economic miracle—but it is fading, weak and fragile and needs to be handled with considerable care if it is not to be derailed. That is why the debate about the drive to reduce taxes which has seized the Conservative party is worrying. The economy is now performing substantially less well than it was a year ago and borrowing has not been brought under control. It is therefore extraordinary that, having been told last year that the position was so bad that there had to be a 3 per cent. increase in taxes, we can now apparently, against an even worse background, discuss tax reductions. That policy does not add up.
The Government, who have claimed that they have an unyielding war on inflation—to reduce it and keep it permanently low—are clearly using much more relaxed language when they refer to inflation. The Chancellor of the Exchequer says that the target is 2.5 per cent., but if inflation turns out to be something above 4 per cent. we will be relaxed about it. That does not show the same degree of determination as when he first set the target.
The need to reduce interest rates is more important to virtually everyone involved in the British economy than immediate short-term and unsustainable tax cuts. A 1 per cent. reduction in interest rates would save the Government £2.5 billion a year in interest payments. [Interruption.] Hon. Members are making remarks from a sedentary intervention so perhaps I should quote the Chief Secretary to the Treasury when he was speaking about last year's Budget. He said:
This year … we are set to borrow £34.5 billion, which is more than £25 a week of borrowing for every household … We forecast for next year a PSBR of £21.5 billion … Even at those levels of borrowing, no prudent domestic or international observer of the British economy should have expected to see tax cuts in this Budget … in the real world … it is more important for the British Chancellor of the Exchequer to be right than to be popular."— [Official Report, 30 November 1994; Vol. 250, c. 1237.]
We seem to be hearing a different story. If £21.5 billion did not justify tax cuts when they were forecast and we are now talking about £30 billion as the outturn, it is difficult to see how the Government can justify the debate that they have allowed to take off among their Back Benchers. The Chancellor is being pushed to bribe the electors with their own borrowed money. He is borrowing at the rate of £1,000 per second. Some £160 billion of debt has been added to the national debt over the past five years--in addition to the equivalent of 8p extra on the basic rate of tax. Earlier, I intervened on the Chancellor to quote from his summer economic statement, in which he said:
public borrowing is actually taxation deferred."—[Official Report, 12 July 1995; Vol. 263, c. 979.]
That is a good summary and should be noted. It will be noted after the election if taxes are cut before the economic circumstances exist to justify and sustain them.
There was a time when Ministers took pride in the fact that they were sound financial managers of the economy, but they no longer listen to their own advice. The general election is pressing down hard on them and good economic management is less important than kidding the voters that the Government can deliver a miracle and hoping that the electors will not take account of the failure of the Government's forecasts.
In the same debate on the economic forecast, the right hon. Member for Fareham (Sir P. Lloyd) said:
With the overshoot in public borrowing last year, this year and next year, I fear that any tax cut, large enough for the Chancellor to boast about it, would rightly undermine confidence in the City and abroad in his consistency and good housekeeping, and would leave taxpayers thoroughly unimpressed to boot … They"—
the electorate—
would note that the election was getting closer, and they would ask whether it would not have been easier all round not to have hiked up taxes last year just to lower them this year … Higher interest rates would not be good for investment, and the historically low rate of investment is probably our most persistent economic problem and the greatest threat to economic growth in the longer term."— [Official Report, 12 July 1995; Vol. 263, c. 992.]
That was a Government supporter speaking in the House. Yet such is the political imperative that all that sound advice and sensible analysis is now being forgotten.
Conservative Members, perhaps understandably, criticised the shadow Chancellor's speech because it did not give an alternative policy, but he has tabled an amendment which we can support because it identifies many of the things that are wrong. I agree with some of the Conservative criticisms that Labour's position lacks clarity on a policy about which electors are increasingly anxious to hear. The Labour party does not have a clear economic policy or tax policy to convince anyone. It may have a useful electoral strategy, but not an economic policy.
The deputy leader of the Labour party has said on numerous occasions that cuts in the standard rate of tax could not be justified at present and should not be supported, but there has been no sign of what the Labour party will do. It seems that it will criticise policies, but allow cuts to be imposed even when they are irresponsible and will ultimately have to be reversed because they have been introduced at the wrong time against the wrong economic background.
It is hardly surprising that the late John Smith's economic adviser, John Wells, left the Labour party in disgust last week. He said that Labour's policy was "simply dishonest". He said:
To argue the case for increased national investment … and then fail to provide and advocate the necessary means for achieving this is … a great deceit on the British people.
Labour is apparently committed to a 10p tax—the right hon. Member for Worthing (Sir T. Higgins) was right to say that the level of tax is not known-5 per cent. VAT on fuel, higher benefits and higher spending. I wonder whether the shadow Chancellor is taking tax advice from Sting's accountant. The shadow Chancellor has been able to make his figures add up, but nobody outside the House can square them. It has been estimated that the minimum cost of a 10p tax rate would be £6 billion and we are entitled to know how that would be funded. It is not the most efficient way to deal with poverty anyway.
As the Chancellor of the Exchequer acknowledged in his speech, we set out our alternative strategy in the Liberal Democrat's alternative Budget that we published yesterday, from which I shall pick out four points. Our Budget comes in advance of the Budget and the Chancellor is still in purdah so he might benefit from advice. We believe that reducing interest rates would be the biggest single contribution to assisting the economy. Interest rates in the UK are higher than those of our main competitors; they are higher than those of America,

Germany and Japan. The Chancellor must not put at risk any opportunity to reduce them and he certainly must not place them in danger of being pushed up.
That is one reason why we have consistently argued for an operationally independent central bank. It is important to include and understand the adjective "operational". The policy parameters for the independent bank should be set by Government, but their day-to-day administration should be a matter of economic judgment, not political judgment. If we operated on those terms, we would achieve lower inflation and permanently lower interest rates. Our inflation target is in the range of 0 to 3 per cent. because we believe that the 1 to 2.5 per cent. range is proving unrealistically narrow.
I wonder whether there should be some review of the operation of the inflation report. The discussions that I have had with the Bank of England suggest that trying to second-guess what will happen in two years is a very tricky business that is open to different interpretations. We must reach some agreement on how the report can operate more effectively and how we can take into account the balance of arguments. We must not have a futile argument about who is right, but must make a realistic assessment of the best estimate.
We have proposed several tax reforms in our alternative budget. As a Member of Parliament representing a Scottish constituency and one who is interested in Britain's trade, I am glad to announce that we have specific proposals about the spirits tax. It seems that the pique displayed by the Chancellor last year following his defeat over value added tax and his decision to introduce extra taxation of 26p per bottle on spirits has backfired. The Treasury received less revenue from the sale of spirits this year than in the previous year. I hope that the Chancellor will learn from that experience and will take account of the Treasury Select Committee's report on the matter. He must recognise that the time is right to reverse that decision, if not go further and cut spirits duty by 56p per bottle. Spirits are our single biggest export earner and it is astonishing that we should treat them so badly in our home market.
We have also introduced a progressive proposal to reform taxation which independent experts acknowledge is extremely efficient at delivering a transfer of funds from the better off to the poor and helping people to climb out of the poverty trap. We would impose a 50 per cent. tax on earnings over £100,000 per year and we would then use the resulting tax yield to remove 750,000 people from the tax bracket altogether by raising the threshold and harmonising the starting level for tax and national insurance. That would be a useful tidying-up exercise and I believe that the Chancellor should take our advice. Our proposal is progressive, fair, easily costed and self-financing.
The most important commitment in our alternative budget is our pledge to allocate £2.5 billion over and above the sum allocated by the Government to education and training. Unless we raise the standards of education in nursery schools, secondary schools, universities and training colleges, we will not lay the foundations for the sustained economic performance that will deliver the economic strength to finance future programmes.
In conclusion, the Government can no longer claim to have presided over an economic miracle. The economy is faltering, the Government have failed to meet their own


targets and we desperately need money for education and training in order to secure our future. We must invest now if we are to deliver success in the future.
In that context, I shall make two points. First, if the Chancellor introduces irresponsible tax cuts in next week's Budget, we shall vote against them on the grounds that the money should be spent on education and on bringing borrowing under control. Secondly, if the Government do not switch from short-termism to a long-term vision for the future, they must recognise that they have been in power for too long and they should make way for those with fresh ideas and a fresh approach who may deliver what the Government have failed to achieve in the past 16 years.

Dr. Keith Hampson: I was interested, at both a personal and an economic level, in the suggestion by the hon. Member for Gordon (Mr. Bruce) that we should slash the duty on spirits. However, he forgot one important argument. If we were to see the level of devolution in Scotland for which he and Labour Members argue, extra tax would have to be generated to pay not only for the cost of running that Government but for all the commitments that a left-wing Government in Scotland would inevitably impose.

Mr. Malcolm Bruce: No, it will not. We will have proportional representation.

Dr. Hampson: The Labour party might have some thoughts about that. Under the present constitutional arrangements, we have seen the massive transfer of resources from south of the border into Scotland. Public expenditure per head in Scotland far exceeds its levels in England. People in my constituency in the north-east and in Yorkshire will not agree to continue to fund high cost programmes if Scotland is afforded the degree of devolution that is proposed. Therefore, the Scots would have to meet the funding gap themselves. That seems totally absurd economically, and even a reduction in the spirits duty would not generate enough economic growth to meet that gap.
The hon. Member for Gordon—who has served on the Trade and Industry Select Committee—is one of the few hon. Members who studies the Committee's reports. Labour Members never read the reports, and Opposition spokesman after Opposition spokesman acts as if the information, tables and statistics contained in them are totally irrelevant—they certainly do not understand them.
The Committee's report on the competitiveness of the manufacturing industry contained some valuable assessments of productivity levels. The hon. Member for Gordon served on the Committee during that inquiry. The Committee found that productivity in this country improved by 6.3 per cent. last year and, throughout the 1980s, the figure was 4.5 per cent. That was the fastest rate of improvement of any of the advanced nations in the 1980s—admittedly, from a lower base—apart from Japan. The rate of productivity improvement in the 1970s was 2.2 per cent.
The shadow Chancellor is correct to refer to the relative decline—although he forgot to use the word "relative"—of the British economy. There has been a relative decline,

as the Government documents on competitiveness clearly point out. However, at the heart of that relative decline are the rotten levels of productivity sustained, year in, year out, under Labour Governments. That is why we are now so far behind most of our major competitors.
On page 37 of the report there is an interesting box graph which illustrates the direct wages and the social add-on wage costs in the automobile industry across Europe. The Committee travelled to Munich and visited the BMW factory. The managers at that factory told us how they had spent two years negotiating with the unions to get rid of some of the imposed social costs. They said that they were looking forward to investing in industry in this country.
The figures are clear: wage costs are approximately the same in the United Kingdom and in Germany, but the add-on costs are 26 per cent. in this country and 47 per cent. in Germany. The add-on costs in Sweden are 46 per cent.; in Belgium, 37 per cent.; in the United States, 33 per cent.; and in Japan, 33 per cent. We have an enormous advantage, so why do the Opposition parties wish to saddle British industry with the sorts of additional costs that Germany is trying to be rid of?

Mr. Bruce: The hon. Gentleman is correct in his analysis. However, I attended that meeting when the managers spoke of voluntary costs, such as paying for their employees' weddings. They had agreed to meet those costs; they had nothing to do with the social chapter. Government Members must stop misrepresenting the situation. If social costs are too high in Europe, it is because countries have reached internal and domestic agreements, not because the costs have been imposed by the social chapter.

Dr. Hampson: But it is symptomatic of the psychology and culture of industry on the continent that is part and parcel of the social chapter. The social chapter embraces that sort of thinking. European industry is trying to get rid of some social costs, so it is sheer economic lunacy to try to impose similar costs on industry in this country.
The Chancellor referred to the fact that there has been substantial growth and that unemployment has fallen dramatically. In Leeds, in my constituency, there has been a dramatic improvement on the job front. There are now many unfilled places in the job market. I shall move from the Chancellor's Rose and Crown philosophy to the philosophy and outlook of the Fox and Hounds in Bramhope. Last week, business men told me that it is important that the Budget stimulates them to recruit new employees—particularly young people. The economy in Leeds is booming. Leeds remained successful throughout the recession, but it would still like some extra encouragement.
In one sense, I agree with the hon. Member for Gordon. Interest rates are at the heart of it. We have to ensure that they do not go up and that our economic strategy is not at the cost of preventing lower interest rates. As has been pointed out, the Treasury still has time to make adjustments. I am in favour of tax cuts, depending on exactly where they fall, as they are part of maintaining the enterprise system. We need that degree of stimulus and reward to ensure growth. We should aim and strive for a low-tax economy, and there is scope in the Budget to move further towards it. The business men in the Fox and Hounds were asking for help with national insurance.


They thought that the NIC was inhibiting them taking on quite as many people. If there is still a chance, that tip and hint might go down very well.
I should draw attention to the role of the training and enterprise councils, which represents one aspect of the success of Leeds. TECs have had a bad name from an awful lot of people, particularly Opposition Members, but in Leeds the TEC has worked extraordinarily well in partnership with the private sector and has achieved dramatic success in increasing the number of young people and adults getting qualifications and work experience, while lowering the unit costs.
In the past three years, youth training provision has doubled and, in terms of national vocational qualifications, the Leeds TEC stands 27th out of 81. It has achieved dramatic success in increasing the number of young people getting qualifications and two and a half times as many adults go through the system. That is crucial to Leeds, where there has been enormous diversification in the city's economy, which has developed from a few stable, heavy industries to a broad range of high-tech and service sector industries, including insurance and law in particular. The city physically has benefited and gained enormously. It is vital, therefore, that the training base is developed as successfully as before and even more so. The whole country needs a more highly and broadly educated work force.
I have some figures from the Financial Times which show that, because of inadequacies of numeracy and literacy, an estimated £5 billion costs fall on industry. When we discuss our education programme and the measures in the Queen's Speech, we must not overlook a basic fundamental failure which has continued through every Government. One in five young adults needs urgent help with numeracy and one in seven with literacy, and 35 per cent. of 21-year-olds do not have the maths skills expected of 12-year-olds in the national curriculum. Report after report comparing the standards of those leaving education at 16 shows Britain falling way behind the standards of most of our rival nations, particularly in maths.
It is not enough to acknowledge that there is a problem; we have to deal with it and at last the Government have done something about it. Had the process of getting to grips with the problems been started earlier under the last Labour Government, we would be in a different position now.

Mr. David Clelland: That was 16 years ago.

Dr. Hampson: As a former teacher, I can tell the hon. Gentleman that education always has a lead time of at least 15 years. By the time a young person who enters the school system gets stimulated to take maths, for example, goes through school to college, into teacher training and back to school, different techniques have been introduced. There is a long lead time.
Hon. Members may recall the "great debate" when Labour was in power. The then Mrs. Williams launched that great debate, following the speech of the then Prime Minister, Lord Callaghan, at Ruskin college. He said that the education service was failing the nation, particularly industry, as it was not producing enough people with the right standard of maths and so on. So there was a great debate on the national curriculum. It went all round the country to conference after conference and what

happened? Because the Labour party was the pawn of the teaching unions, nothing happened. They dismissed the whole thing.
Had there been a national curriculum in the mid-1970s or had Prime Minister Wilson, after his accurate diagnosis in the 1960s that we needed the white heat of the technological revolution, done something other than put as head of the Technology Ministry a clapped-out trade union magnate—Frank Cousins—and if those opportunities had not been missed, the lead time would now be producing results. The Opposition did nothing. We had to do it and they opposed the national curriculum every inch of the way.
When we set the standards and introduced the testing system, they opposed it. Of course the system had to settle down. It was not ideal in its early days, partly because we listened too much to the education experts with whom the Labour party is hand in glove. We have at least the basics in place, and the Queen's Speech takes the process further. We now have to ensure an awareness of learning and the seedcorn of literacy and numeracy as early as possible in the system.
I welcome thoroughly the voucher scheme for nursery provision. Yet the Labour party in Leeds ruthlessly attacked it and therefore did not apply for the pilot scheme money. So, for political reasons alone, the Labour party in Leeds has denied families in Leeds the opportunity of a huge expansion in nursery provision as early as next year.
According to the Audit Commission report, Leeds is not a good story in terms of nursery provision. It is below halfway down the list and requires a great deal of extra nursery provision. It simply will not do for the city group leaders in the Labour party to argue that the voucher scheme would deny the city money that it was already spending—the fact that it has not spent that much is another matter. It has to be stressed to the people of Leeds that they are missing out. If the city were producing such good nursery provision, it would not lose money under the scheme because there would be the same number of children in the schools or, if provision were so brilliant, there would be more. If nursery schools took more children, they would get more money and they would lose money only if fewer children entered the nursery education that the city provides.
Leeds needs a more diversified provision than is offered by the city itself. Out of a total of 130 nursery schools in the city, only three are in my part of it. So two young mothers, having found that there was a waiting list of more than 260 to get their three-and-a-half-year-olds into nursery school, decided to set up their own school. It is called Clever Clogs and operates in Cookridge primary school. It represents an excellent working partnership between the state school and a private enterprise initiative. If Leeds had the voucher scheme, parents could use that school on a bigger scale.
Other parents would be tempted to set up such new schools, but different from that one. The advantage is that a nursery provision incentive such as the voucher scheme stimulates different varieties of provision. It encourages some to be progressive and others to be more traditional. It allows parents that choice. The state provision would still exist, but parents might decide on a more progressive or traditional environment. They would be able to cash in their vouchers and enjoy a degree of choice, which would


put competitive pressure on the city council to ensure that its provision is good enough to attract parents to its schools.

Mr. Beggs: I am pleased to hear about that excellent co-operation between parents and schools in the hon. Gentleman's constituency. I say with regret that the Department of Education in Northern Ireland would require such expensive modifications to vacant existing accommodation in primary schools that similar provision would not be possible there. Does the hon. Gentleman agree, given that children grow up in homes that do not have special toilets or hand basins for them, that massive adaptations to primary schools offering vacant accommodation are not necessary and that we should welcome provision in such locations?

Dr. Hampson: That is a valid point in the context to which the hon. Gentleman refers, and no doubt it will be taken on board by the appropriate Ministers in operating a system with which I am not au fait.
My final point concerns the higher end of the education system. A modern economy must offer the widest possible range and real excellence. If Labour had done anything about reforming and expanding higher education, the country's economy would be much stronger. I remind the House, and the shadow Chancellor, who has just returned to his place, that the only time since the war that the proportion of the age group entering higher education fell was under the last Labour Government. It was not high then—only 12 per cent. The figure has increased from one in eight 18-year-olds entering universities to one in three today. That target was set for 2000, but has already been achieved.
No other Government have ever expanded opportunities for young people on such a scale. The only Administration that came anywhere near was that of Harold Macmillan, who created the last major expansion in higher education provision. The Government need to boast more about their achievement.
Part of that expansion process involves giving financial assistance to students. The increase in their numbers could not have been funded by the traditional maintenance grant—there had to be a loans scheme, for which I argued over many years. However, I do not believe that the present scheme is operating effectively. The proposals in the Gracious Speech will help, provided that the banks are willing to participate in a generous way. Some of us called for the scheme to be operated initially through the private banking sector. That would have had the inestimable advantage of allowing the student to walk across the street to the local branch, where he probably deals with the manager about an overdraft anyway, to arrange a loan tailored to his needs. Instead, students have to operate at arm's length with a huge bureaucratic operation in Glasgow that has cocked up time and time again.
The new head of the Student Loans Company is doing a fine job of improving it, but only 55 per cent. of eligible students are taking up loans and that is not enough. The scheme must be expanded, and I trust that the banks will be given enough freedom to allow that. Will the banks be allowed to exercise discretion over the repayment period? One disincentive of the present loans scheme is that

students must make repayments at a steady rate over five years. The worst time for any young person to repay a loan is when he has just entered into a mortgage or started family commitments, when he is at the low end of the income scale—yet faces the prospect of starting repayments at that front end. If the banks can have more freedom on repayments, we shall be on our way to funding properly the finest expansion of student opportunity that the country has ever seen—and one achieved by a Conservative, not a Labour, Government.
As with all the education reforms that the country desperately needs, if the economy is to compete effectively, that expansion has been overseen by a Conservative Administration but frustrated year in, year out, by Labour—whether in or out of Government. The sooner the people of Leeds recognise that fact, in a city in which Labour has its dead hand on the school system, the better. A Leeds university independent report published some years ago clearly proved just what a dead hand on the primary school sector Labour had. It was nothing to do with resources, and everything to do with expectations set by the LEA and with the nature and quality of teaching in those schools. Both locally and nationally, the country must recognise that Labour has done an enormous disservice.

Mr. James Molyneaux: I share the reservations of the right hon. Member for Worthing (Sir T. Higgins) in regard to the curious timetable in the early weeks of each new Session. That timetable, and the reasons for it, become more bewildering every year. The only advantage is that one can indulge in tendering advice to the Treasury Bench in regard to the Budget, which I shall try to do with restraint in the brief time available to me.
In two major debates a year ago, my hon. Friend the Member for East Londonderry (Mr. Ross) and I reiterated the consistent views of our Ulster Unionist party on key aspects of the economy. They were that there should be no fixed exchange rates, which view is gaining great popularity throughout Europe; that the national debt should be repaid, which ought to be an admirable principle for individuals as well as for nations; that the Government's excellent achievement of lower inflation, on which all else depends, should be maintained; and that there should be a steady reduction in the public sector borrowing requirement, with consequential beneficial effects in many areas of our national affairs—a point made well by the hon. Member for Gordon (Mr. Bruce).
Those objectives will not be achieved if the Chancellor yields to demands for tax reductions, which will really mean a reduction in revenue. Another serious loss of revenue resides in the expanding smuggling industry, which is reaching alarming proportions. There must be an early crackdown on those illegal activities.
Tax reductions in particular would jeopardise the present enviable position, in which Britain's long-term fiscal prospects are the strongest in the world—although that remark may be at variance with the comments of the shadow Chancellor. A curious feature is that investors, particularly overseas, do not seem to recognise the truth of that. The Chancellor reported a significant increase in investment but much more is needed. Perhaps potential investors are paralysed by the spectre of a general election


that, with a bit of luck, is more than 18 months away. [HON. MEMBERS: "We agree."' Get the crystal ball out. Investors should take heart from the knowledge that we are all monetarists now.
Some months ago, the Chancellor was correct to overrule excessive caution by the Bank of England with regard to interest rate cuts. Modest further reductions would give a much greater boost to the economy than a confetti-like scattering of tax cuts, which would have only a short-term effect. A reduction in interest rates, on the other hand, would bring lasting benefit to the construction industry, for instance. Expansion in such areas would have beneficial knock-on effects on unemployment and social security, and would soon help to reduce the PSBR.
Not surprisingly, I found my feelings in tune with those of the right hon. Member for North Shropshire (Mr. Biffen), who has just left us, especially during his broadcast of this morning. I reflected as he spoke that he and I are the only true guardians of the right-of-centre faith left in the House.
I shall now deal with the report by the president of the European Court of Auditors of 14 November, which commented on the amount of public moneys lost through fraud or in other ways—at least 400 million ecu, with probably more to be discovered. Careless citizens may shrug off such losses in the belief that it is all Brussels money anyway, but they are unaware that it is mainly British and German money. Losses through fraud touch directly on the very reasons for the existence of Parliament: accountability and the control of supply. A substantial cause for concern lies in the considerable errors found elsewhere when payments have been made to recipients whom the court considers ineligible for them under the programmes concerned. The errors take place in member states, where tens of thousands of national, regional and local officials are involved.
Improved financial management and control are clearly required at all levels, but essentially responsibility for policing and disbursement of public moneys lies with national Governments—a point emphasised in the long-running saga of a certain beef scandal concerning one of Northern Ireland's close neighbours. [Laughter]. I am trying to be delicate. It is therefore extremely important to change the behaviour of member states, which should attempt not to maximise the funds that they can obtain but to gain the maximum value for money from them.
Nowhere in the United Kingdom is this more important than in Northern Ireland, where we hear much about proposed partnerships and accountability, especially in the context of the programme for peace and reconciliation. Her Majesty's Government have a heavy responsibility to ensure that the commendable objective of partnership does not supersede the vital issue of accountability. Nor must officials usurp the authority or functions of Her Majesty's Ministers. In his exchange with the Chancellor of the Exchequer, my hon. Friend the Member for East Antrim (Mr. Beggs) made a relevant point in this regard.
I remind the House that new and ad hoc structures do not necessarily have the in-built safeguard of long experience in meeting the close scrutiny of, say, the local authority audit. Our sound traditions and practices in those areas are worth preserving if we are not to degenerate into the laissez-faire methods that we find so unacceptable in other places.
Commissioner Liikanen said in Strasbourg recently:
Where legislative improvements and clarifications are needed the Commission, Council and Parliament have to pay more attention to the requirements for effective implementation. Simplification, clear qualified objectives, ex-ante, mid term, and ex-post evaluation, should become standard for all programmes.
I entirely agree with that proposition.

Mr. Tim Devlin: In welcoming the Gracious Speech I must say in passing that I was staggered to hear the hon. Member for Gordon (Mr. Bruce) say that nothing very much had changed in the past 16 years. Seventeen and 18-year-olds who will be voting next time at their first general election look at the Tories and say, "What a shower; the Labour party would do things much better." Once upon a time, not so many years ago—in 1979—I was a 17-year-old. If people think that nothing has changed in the intervening years, they must be amazingly badly informed.
I remind the House of what was happening in the last years of the Labour Government. Rubbish was piling up in the streets because the Transport and General Workers Union did not want to collect it. There were strikes in our major industrial plants every day. The gravediggers were refusing to bury the dead. Hospital porters told people that they would vet them on their arrival at hospital to see whether they were ill enough to go in.
It seems extraordinary now that, when people went to the shops, they never knew how much they would have to pay for goods of the same kind as they had bought the week before. The same amount of money as was spent the previous week bought less the following week. Inflation rose to the quite unbelievable level of 27 per cent. at one stage.
Opposition Members will lean back on their Benches and say that that was old Labour, whereas they represent new Labour. I grew up in a Labour household, dedicated to the sort of socialism that the right hon. Member for Chesterfield (Mr. Benn) propounded earlier this evening. When I was young, I met a lot of people from the Labour party—all nice, idealistic types like those who sit on the Opposition Benches. They all wanted to do a good job. With their trade union backgrounds, they wanted to build a better nation. They all thought the Conservative party was making a mess of things and that everything would be better under a Labour Government.
Matters got worse, however—dramatically worse. People of my age with small children will tell their three-year-old kid not to put his hand in the fire: "Tommy, you'll burn your hand." They tell the child the same thing two or three times, but one day when they are not looking little Tommy puts his hand in the fire and burns it. He never does it again. I think that the 16 million people who have never voted in a general election when the Labour party has won are rather like Tommy. They are going to put their hands in the fire just to see if it is really as bad as granny says it is. They are in for a shock if they do—

Mr. Deputy Speaker (Sir Geoffrey Lofthouse): Order. It would be a good idea if the hon. Gentleman now turned to the Queen's Speech and the amendment to the Loyal Address.

Mr. Devlin: All this is why I welcome the Queen's Speech—it builds on the achievements of the past 16 years.
It is staggering that the Leader of the Opposition called it irrelevant. I have always thought that a Government's first responsibility to the nation is to provide peace and security, on which score this Government stand second to none. The Queen's Speech includes three Bills that deal specifically with military security.
Times have changed, however. In the 19th and early 20th centuries, questions of military security loomed large. Nowadays, our security is threatened not so much or so immediately from any military quarter as by an economic problem, which is why I welcome some of the economic measures both in the speech and in the forthcoming Budget. Another threat to our internal order is posed by crime and drugs, which constitute a significant threat to the peace and security of the realm. I am pleased to see measures in the Gracious Speech to tackle them as well.
In terms of economic security, we find ourselves in a position that no Labour Government have ever been able to achieve. Inflation is under 4 per cent., and we have had one of the longest runs of low inflation that we have experienced for 30 or 40 years. Industrial investment is at an all-time high.
I was amazed that the shadow Chancellor had not managed to find time in his busy day to look at today's Financial Times, which published an article headed
Industry investments reach four-year high".
I know that the hon. Gentleman is not very good on detail, however. Let me read hon. Members the first paragraph of that report:
Manufacturing investment in the first quarter of the year was the highest for more than four years, official figures showed yesterday.
I do not want to embarrass the shadow Chancellor by reading the rest of the article, but its general tenor was that Britain's economy is doing extremely well.
Labour has now set up an industry forum. It charges companies to go along and tell its members what they do not really want to hear, hoping that they may nevertheless glean something from it. I have attended a number of such meetings. Last night, I heard Sir John Egan addressing the Air league. He told us that the only companies that would succeed in the 21st century were companies that excelled—companies that were of high quality, and did whatever they did better than anyone else in the world. Indifferent performers would not survive, he said. Europe should play to its strengths—and Britain in particular was playing to its strengths better than many of its European competitors.
A couple of months ago I attended another forum, at which the chairman of BMW said:
Great Britain, for example, is currently the most attractive country among all European locations for the production of cars. This results from the structural reforms initiated by Margaret Thatcher in the early '80s, the most significant of course being the re-arrangement of industrial relations between companies and trade unions".

From time to time, unlike the shadow Chancellor, I look at OECD reports. The latest report states:
There also appears to have been an underlying improvement in the competitive position of the manufacturing sector, reflecting inter alia an influx of foreign direct investment, and an upgrading in technology and quality control standards. A competitive exchange rate and low inflation have consolidated these gains. In 1994, strong net exports further boosted output in production industries".
Forgive me if I am getting it wrong—I am no economist—but that strikes me as a fairly glowing endorsement of Britain's current and economic performance.
I do not want to talk about abstract measures; I want to talk about specific issues that affect my constituents. My constituents have undoubtedly been affected by the continuing fall in unemployment. That is the topic about which they always ask me, and the topic about which I worry most. I tell them that we have had month-on-month improvements in employment rates. Under Labour Governments, unemployment never fell; it always increased.
Moreover, we in the north of England have seen the fruits of the one third of all inward investment that comes into the European Union. Recently—along with the Queen—I attended the launch of Samsung's investment in Stockton-on-Tees. I also went to the Siemens launch on Tyneside. Fujitsu has just launched a huge expansion in Newton Aycliffe, and, according to a recent edition of Electronics Weekly, the north of England has become a globally significant area for the production of semiconductors. That has happened as a result of the Government's policies.
There is no possibility that the industrial renewal that I see when I visit factories in the north and the midlands would have come about if we still had Red Robbo and the old trade union bosses. They did not want to know. People now say that the British work force is one of the most flexible and highly skilled that can be found, and we are now exporting cars all over Europe—cars built by British workmen to better standards than those built in Japan. The north-east, and Britain as a whole, should be proud of that.
When the Leader of the Opposition visited Newcastle university recently, he said that the north of England had made fantastic changes and he poured praise on the region for its marvellous achievements, but did he mention the Government policy that had brought that about? Did he heck. That is amazing. No one would have known that the Department of Trade and Industry had been involved in the various investments; the name of Michael Heseltine would not have passed the right hon. Gentleman's lips as he passed the site of the new Siemens factory. People do not want to know where all the good news is coming from; what they want to hear from the Labour party is that everything is wrong.

Mr. Jimmy Hood: Will the hon. Gentleman give way?

Mr. Devlin: I do not want to waste the House's time by listening to the hon. Gentleman, who may make his own speech if he is called.
Not only are we living in a highly competitive country in terms of industrial relations; we are one of the most technologically advanced countries in terms of our investment in cable. I find it unbelievable that the Labour


party wants to sign up to a deal with British Telecom to link every school, hospital and library to the information super-highway. The Leader of the Opposition's constituency is next to mine. My constituency is currently being "cabled up" by a company called Comcast Teesside, which is connecting every school, library and hospital free of charge—not five miles from the constituency of the Leader of the Opposition. Either the right hon. Gentleman does not know, or he does not want to tell the British public. Either way, there is something very wrong with what has been going on in the Labour party.
Labour's sole strategy now is to be an idea and commitment-free zone, as it tries its best—having paddled furiously for all these years—to let things drift and see whether the tide will take it into government. That is the ultimate counsel of despair; Labour has nothing to offer.
I welcome the marvellous opportunity provided by the Queen's Speech for us to tackle the problem about which our constituents are most worried: crime. Having recently spent a night on the beat with the police force at Stockton-on-Tees, I know that drugs are behind a good deal of crime. Given the state in which people are brought into the cells having been arrested at 4 am, I can only pay tribute to the heroism of our police officers. If I may use that great old LSD phrase, these people are completely out of it: they do not know what they are doing. They are as high as kites on all sorts of drugs. We must do something about that.
I believe that tackling the drug problem is the most important priority for the Government in the years to come. That is why I welcome the deployment of MI5 in the fight against drugs. I would very much welcome the redeployment of the Royal Navy in the Caribbean, where our solitary ship is doing marvellous work in tracking drugs that end up in this country. I also welcome—as will my constituents and local police force—the 5,000 extra police officers who will be deployed on the beat.

Mr. Hood: rose—

Mr. Devlin: Before the hon. Gentleman intervenes again—perhaps to tell me about my majority—let me remind him that, in the previous Parliament, he wrote me off. He said goodbye to me, and told me that I would lose. I returned with a majority that was five times bigger and represented the largest swing in the country. That was done in the north of England, but I believe that it can be done again in all the constituencies in the south.

Several hon. Members: rose—

Mr. Deputy Speaker: Order. I remind the House that Madam Speaker has placed a 10-minute limit on speeches between 7 pm and 9 pm.

Mr. Ian Pearson: It is apposite that I should follow the hon. Member for Stockton, South (Mr. Devlin), who talked about election swings, because less than 12 months ago at my by-election Labour received the biggest swing in post-war history, producing a majority of more than 21,000.
Economists tell us that, technically, we are three and a half years into a recovery. That is news to many people in my constituency. The Government should try telling it to Baggeridge Brick, a leading building materials

manufacturer that is now warning of meltdown if nothing is done to support the housing industry. They should try telling that to the people who are unemployed in Brierley Hill, and in Brockmoor and Pensnett, who are still suffering desperately from the decline in traditional manufacturing industries in the black country, and the complete failure to create sufficient jobs and wealth. They should try telling it, too, to the many people who are suffering from job insecurity, which far from being a state of mind, is an evident fact for the people who talk to me at my advice surgeries.
I shall confine my remarks to four areas—economic growth, public sector accounting, the role of company profitability and inflation—and touch briefly on each in turn. First, anyone who is seriously committed to establishing high and sustainable levels of employment must recognise that the Government should set growth targets as well as inflation targets.
There is an urgent need to raise the economy's long-term sustainable rate of economic growth by increasing investment not only in plant, equipment, buildings and other works, but in human capital. Only in that way will we reduce unemployment, by increasing the employability of the work force, and thus the underlying productivity growth of the economy.
Secondly, the Government should use not the public sector borrowing requirement but the general government financial deficit—the GGFD—as the main indicator of fiscal stance. They should recast the public accounts in line with commercial practice. As the Minister will be aware, the GGFD is the criterion used in the Maastricht treaty as the European Union definition of Government debt for the purposes of measuring the degree of convergence between member states in advance of the single currency. So far as I am aware, in the other countries of the EU, it is accepted as the major indicator of fiscal stance.
The Government need to speed up their review of public sector accounting, and move towards more of a private sector approach. I should like to see a Government balance sheet, profit and loss account, and a statement of source and application of funds. The distinctions between current and capital spending are still far too vague and need tightening.
In particular, I should also like to see regionalised accounting of expenditure and assets, so that for the first time we would know how much money was being spent in each individual region. We could use that information as a starting point for establishing regional economic development strategies.
I see no rationality in our current public expenditure system, which treats NHS trusts as public corporations but GPs as private sector unincorporated businesses. Most schools are treated as part of central Government, but grant-maintained schools are treated as part of the private sector. Like universities, they are described as private non-profit-making bodies serving persons. And I see no justification for classifying, as the public accounts do, the Bank of England banking department as a private sector financial institution.
Thirdly, company profitability is important to economic growth. Profits and profit growth are good for the economy. Sometimes I feel that the Opposition do not


emphasise that fact sufficiently, and do not say enough about the role of profits in a social market economy—the role of profits as a signalling mechanism.

Mr. Devlin: A signalling mechanism?

Mr. Pearson: Yes. Standard economics says that industries making higher profits than normal tend to attract companies into those industries. Where profits are below normal, the reverse tends to apply.

Mr. Hood: He does not understand; he is only a lawyer.

Mr. Pearson: Do not believe it.
Retained earnings provide the bulk of investment in small and medium-sized companies. They are also a major source of investment for many large companies. However, as the Opposition fully recognise, retained earnings do not automatically lead to a strong surge in industrial and commercial company investment. Certainly the rise in corporate profitability in 1994 did not translate into any increase in meaningful investment in the United Kingdom economy.
Profits are also important because they fund pensions for an increasing proportion of people in the United Kingdom. I do not want to enter what is called the Dorrell debate about the level of dividend pay-outs by companies. I say only that I am not persuaded that current dividend growth is excessive; there are strong arguments why dividend growth must be maintained for the sake of long-term investment vehicles, which will be required to pay for the pensions of the future.
My fourth topic is inflation. At present, there is a great misunderstanding about how inflation is created in the economy and about who should take the credit for reductions in inflation. A major reason why inflation has declined in the United Kingdom, as in almost every other western European country, has to do with the effects of global market competition.
The old economics lecturers used to talk about cost push inflation and companies raising their margins when there was strong demand in an economy, thereby increasing company profitability, but today we have price-based costing, not cost-based pricing. It happens in large swathes of manufacturing industry. Ford, for example, is imposing price reductions of 5 per cent. a year on its supply chain. Companies are taking that on board, taking the price as given, re-engineering their processes and driving costs out of their products. That is a completely different rationale for business, and it means that fears about inflation over the medium term are largely misplaced.
I await next week's Budget with interest. I expect to hear about measures to stimulate the housing market and to encourage investment and training. I should like to expect, too, that the Budget will encourage job creation and bring back job security. The people in my constituency have a right to expect that, but my deep suspicion is that we shall not see it.

Mr. John Greenway: It is a great pleasure to be back in the House after my recent illness. If we did

not have a 10-minute limit on speeches, I would sing the praises of the NHS and particularly the doctors at York district hospital.
I want to talk about the rural economy and rural affairs. That is timely, because the Government published their excellent rural White Paper last month. People in rural areas have their own views about what should be in the Budget next Tuesday, and—if it is not too late—I shall suggest a few of these to my right hon. and hon. Friends in the Treasury.
No doubt we shall have further opportunities to debate the White Paper in detail, but it contains an important section about jobs. The White Paper asks how we can create new non-farming jobs in rural areas, and I would suggest that we add non-tourism jobs—in other words, jobs in the manufacturing sector—to that. The White Paper proposes a new "business use" class within the planning system. At best, that may be highly deregulatory, allowing no-fuss moves from farming into other enterprises. However, one envisages that it will not be quite that simple.
There will be pressure from conservationists, local planners and some local residents, which will mean that, in reality, the process will be much more difficult. Several constraints on the number of vehicle movements and the hours of operation may be imposed on firms, and that is a real worry. We need some early action on planning guidance, followed by action on structure plans and local plans.
My constituency is fortunate to have a number of go-ahead, enterprising manufacturing firms. Slingsby Aviation and Micro Metalsmiths are based in Kirbymoorside, while McKechnie vehicle components—which is making enormous strides, and is at present supplying Vauxhall—is based in Pickering. We also have the successful Ward business, and anybody who goes to Scarborough cannot fail to see the Ward building systems factory in Sherburn, some 10 miles west of Scarborough. We have the Malton bacon factory in, interestingly enough, Malton.
All those firms provide an enormous contribution to local employment, but many of them were started a generation or so ago and have premises for which it is doubtful that they would get planning permission now. One has only to look round the market towns to find that land that planners had allocated for industrial use was quickly filled up by workshops and warehouses. No one is suggesting that we want to put factories all over rural areas, but the factories to which I referred and which were started a generation ago have meant a great deal to the success of the Ryedale economy. If we want a vibrant and prosperous rural economy in the future, we must not just find similar sites, but encourage similar entrepreneurs to set up.
I shall give hon. Members another idea of the planning problems in a part of my constituency. In Scarborough borough, we have the very important and beautiful seaside town of Filey. Some hon. Members may remember that there used to be a Butlin's holiday camp at Filey, called Amtree park. On a good day in June, July or August, there might have been as many as 15,000 people on the site.
The site is now known locally as "little Beirut" and it is totally devastated. But Scarborough borough council refused to give outline planning consent for 600 houses on the site. One might argue about the number of houses,


but by refusing the application, the council lost out on development providing up to 200 jobs. Why? Because the scheme does not fit with the local planning process. All the local people want the development, while the fact that it is covered with asbestos dust ought to fill everybody with utter horror and concern. Planning constraints mean that we are having a real struggle to sort out such a problem, of brown site that has been deeply contaminated. Clearly, something must be done.
I wish to mention rural shops and service industries. The rural White Paper suggests that there might be a rate relief scheme for village shops. But what about market towns? Far too many small businesses and services in the retail sector are in financial difficulty because they are having to pay rent and rates based not on what they can afford, but on what the building societies and national chains think they can afford. Action is needed on that. If we mean what we say in the White Paper about ensuring that market towns have a future, the cost of rent and rates needs our attention.
The White Paper also refers to the sparsity factor in rural areas in allocating support grant to local authorities. That is the most crucial problem affecting my constituency at present. We shall be one of the first areas to undergo local government reorganisation in April next year, when the new York district council comes on stream. Disaggregating the budgets between York and the residual Ryedale and North Yorkshire areas is proving to be a huge problem. I want to raise the matter on the Floor of House on behalf of many constituents who have written to me about it. We must have a fair distribution of the money, and we must do what we can to uphold our promise that reorganisation would not lead to a cut in local services to residents. Both Ryedale and North Yorkshire have serious problems, the latter especially.
The first priority in the Budget next Tuesday must be a better settlement for schools. We have again had excellent examination results, according to the league tables published for North Yorkshire schools, but we cannot dig for ever into the reserves, which are depleted. Schools have used up their balances, and we need a better allocation this year. The Government must heed the warning that, if we do not honour our obligations and responsibilities to education but still cut taxes, many of our supporters will be deeply resentful.
That said, I believe that we still must find some money to reduce taxes in the Budget next week, although not for the kind of party political advantage that the Labour party talks about. It must be obvious to anybody who looks at what is going on in their area that, while factories such as those I have talked about in my constituency are doing very well in an export-led economy, local services and the local economy are not doing so well. That economy is flat, and people need more money in their pocket. In my judgment, that can come only from a low-inflation economy, lower taxes and lower interest rates.
If we are trying to find the money for tax reductions, we should also increase personal allowances to take a lot of low-paid people in the rural economy out of tax altogether. Our failure to uprate allowances in line with inflation over the past two or three years has brought those people into the tax system, and we ought to take them out again.
Finally, those who say that abolishing capital taxes—capital transfer tax and capital gains tax—is simply a way of giving money back to the rich are wholly and utterly wrong. This month's edition of Country Landowner, the journal of the Country Landowners Association, contains an article that describes how capital taxation is wrecking enterprise. It stops businesses—particularly farm enterprises and other enterprises in rural areas—from doing the kind of thing that they want to do. The capital taxation structure is too complex, and the best way to deal with it is to get rid of it completely.

Mr. Geoffrey Robinson: I shall not follow the hon. Member for Ryedale (Mr. Greenway) down his ever-lengthening wish list, and I shudder to think what his ideas would cost. Suffice it to say, scrapping capital gains tax and inheritance tax could cost £4.6 billion by the end of the century.
Before coming to the substance of today's aspect of the Gracious Speech, I want to refer in passing to the Asylum and Immigration Bill and a lady from the Philippines whom I am representing jointly in the House with the hon. Member for Warwick and Leamington (Sir D. Smith) and other hon. Members. Her name is Mrs. Teresita Bentley, whose permission to stay in this country was refused by the Home Secretary. I hope that the Bill will not prejudice her position and that the Home Secretary will look favourably on the representations that we have made.
We heard today from the Chancellor an attempt to redate the period of office of the Tory Government. Some time ago, my hon. Friends will recall, 1983 was taken as the start of the period of Tory government. That was the most propitious date that the Government could find at that time. They have been forced to change that. They now take 1981 as the start. They still refuse to take the obvious starting point of 1979, when they first came to office.
Whatever the Chancellor says, when one looks at the bare facts, the Tories' record is not one of great success, certainly not in the terms in which they have asked us to judge their performance. We did not set that standard. It was set by the former Chancellor, Lord Howe. He said that we must be judged against the relative performance of comparable countries' economies.
The Chancellor made the point, fairly enough, that growth was a key criterion. In terms of growth, we are 13th out of the 18 G7 and EC countries. That is not much to write home about. The Chancellor referred to jobs. There are 400,000 fewer jobs now than at the time of the election in 1979. I am sure that the whole House sincerely welcomes the recent period of declining unemployment. It is good that we have had such a period. However, the simple fact is that unemployment remains 400,000 higher than it was when the Conservatives took office.
In terms of employment creation, we are 20th out of the 24 OECD countries. In terms of male unemployment, we are fourth highest of the 15 EC countries. Since 1979, unemployment in Britain has been above the average for major industrial nations, the EU countries and the OECD countries. It is still above the average of the OECD countries, even after the welcome period of decline in the overall level. In terms of investment, we are still 21st in the league. Of the OECD countries, only Turkey has


fewer 18-year-olds in education than Britain. That is not a particularly sparkling economic achievement on the part of the Government.
Let us take the precise factor on which the Government have set out to redress the balance and improve the position that they inherited—that is, taxation. There, too, their performance is poor. However, before I deal with taxation, I should like to deal with the vexed question from which the Chancellor sought to distract our attention. Why have we slipped from 13th to 18th in the league of GDP per head and purchasing power parities since the Conservative Government came to office? I am pleased to tell the House that I am aided in my argument by access to a Conservative research department brief prepared by Mr. James Walsh for the Queen's Speech debate on 22 November 1995.
The Chancellor diligently exploited the points in Mr. Walsh's brief. Mr. Walsh wrote:
Labour's table is misleading and inaccurate".
He does not tell us why. He went on to say:
Labour's league table is another example of their cynicism: they don't care how spurious their figures are as long as they show Britain in a poor light.
How can we reckon Mr. Walsh's chances of promotion if he is prepared to say that, when the chart that we used was produced by the Government and signed by half the Cabinet—the Prime Minister, the Deputy Prime Minister, the Chancellor and all the rest of them? It showed precisely the figures that we have given. It was not some chart tucked away at the back of the document in some obscure appendix. It was given prime position on page 13 of the Government's key document.
Far from the table being an irrelevant consideration, it is the most relevant of all the considerations. It shows income per head, which, in its summation, tells us about all the other aspects of policy. It is true that productivity has increased. We welcome that, but unless it leads to an increase in output per head, it is of only relative value. The total output of the economy as a whole expressed per head and in terms of purchasing power parities is a measure of the Government's success. By that standard, they are found woefully wanting.
The Government are found equally wanting on the question of tax. The tax burden and the tax share of national income in the economy rose between 1979 and 1995, from almost 35 per cent. to more than 37 per cent. Ominously, it is the Government's own forecast that it will rise even higher, to more than 38 per cent. During the 16 years in which the Conservatives have been in office, the tax burden has averaged 37 per cent., compared with the previous averages of 36 and 34 per cent. under Labour Governments.
A typical British family now pays more in direct tax and indirect tax than when the Conservative Government took office. That brings us to the most recent period of government by the Conservative party. The Chancellor tried his best to explain how, with a burgeoning prospective budget deficit of £50 billion, the Government could find it in them to make the statements that they did just before the previous election, which they had to reverse within the year.
We know that the increases in taxation that the Government have implemented come out at 7p in the pound, or getting on for £800 per family. Whatever the Government do, there is no way in which they can make good that enormous impost of taxation on the British people. What is the Conservatives' reaction? We have just heard the reaction of the hon. Member for Ryedale. The reaction to the fact that ordinary families are paying more tax than ever and that tax takes a higher percentage than ever of the income of working people across the board—not only the least well-off, but all those on average or even double average income—is to propose doing yet again something that will benefit only the very well-off at the top of the pack.
The Government want to abolish inheritance tax and capital gains tax at a cost of £4.6 billion by the end of the century. The Government's response to the increase in the tax burden for all those who really need help is shameful. There is a similar failure on investment. In the Budget, the Chancellor intends to cut capital spending yet again. He says that it will he made up by the private finance initiative. As we know from the preceding Chancellor, the PFI was meant to achieve an increase in public expenditure, not to replace Government expenditure. So we have the prospect of a further rundown in the quality of our infrastructure. I think that all hon. Members will agree that a singular failure of successive Governments is that they have cut capital spending on the improvement of services. What we should be doing is increasing that investment.
I shall now examine the Labour party's approach to the economy. It is wrong for Conservative Members to say that we are not beginning to evolve the policies that we shall put into practice when we form the next Administration. I do not agree with what the Liberal Democrats do. It is not appropriate to come up with a draft alternative Budget. That is not a job for the Opposition, whoever is in opposition at the time. What we must present are the policies that we intend to adopt and fill out in the period leading up to the general election.
In terms of investment, we have already proposed doubling first-year allowances. That is a modest proposal, and I think that other Labour Members will agree with me that we could do something more than that. It is the one proven measure that really—

Mr. Deputy Speaker: Order. Time is up.

Mr. Barry Legg: May I begin- my remarks by welcoming my hon. Friend the Member for Ryedale (Mr. Greenway) back to the House. It is good to see him back in the House after his illness, and it was particularly good to see him give such a vigorous speech. I think that we were all greatly encouraged by his performance.
I should like to comment on one or two other speeches that we have heard this evening. We have had an eminently sensible speech from the right hon. Member for Lagan Valley (Mr. Molyneaux). He made some very sensible comments about the balance of fiscal and monetary policy, and he made some even more interesting comments about how long he sees this Parliament lasting—some 18 months or so. Indeed, those might be the most significant comments that we hear in the Chamber this evening.
I also endorse the speech of my right hon. Friend the Member for Worthing (Sir T. Higgins). We will probably have three economic debates in less than three weeks. This one is less than a week from the Budget, which we will debate for a week from next Tuesday and shortly after that will be the Second Reading of the Finance Bill. Then we will probably have to wait until July for a further economic debate. The House authorities should consider the balance of our debates so that they can be held in a sensible way during the year.
This debate, which the Opposition have chosen, is too late to influence next week's Budget. I am sure that it has been set, but I hope that the Chancellor will be able to bring more confidence to the British economy when he addresses the House next Tuesday, and impress on people how good our economic prospects are. They are extremely good indeed. There is abundant scope for tighter public expenditure. During the past few months, many of my parliamentary colleagues have set out how that can be achieved, especially my hon. Friend the Member for Bridlington (Mr. Townend) and my right hon. Friend the Member for Wokingham (Mr. Redwood). There is plenty of scope for carefully controlling public expenditure and finding further savings. Consequent on firm control of public expenditure, there is scope for tax reductions.
My hon. Friend the Member for Ryedale was right to say that people need a bit more money in their pockets. Conservative Members believe that people are more likely to make the right decisions with their own money and to exercise their choice over spending that money. We do not believe that the Government by any means have a monopoly of wisdom. That is still a clear distinction between us and Opposition Members.
There is scope for tax reductions next week and we also need some adjustments in monetary policy, with interest rates coming down. I do not say so for political, but for economic reasons. When we see the Red Book next week and the way in which the economy performed in 1995, compared with what was forecast last year, we will see an economy that is growing less strongly. I believe that we will see weaker domestic demand, consumer expenditure, gross domestic product growth and fixed investment than was forecast in last year's Budget.
Significantly, we will also see a much lower GDP deflator—the measure of public sector inflation will be much lower than was forecast this time last year. That is the key reason why the spending totals for next year should be reduced and the reduction should be of the order of £7 billion to £8 billion. That is the degree of scope—[Laughter.] The hon. Member for Clydesdale (Mr. Hood) may laugh, but he once again demonstrates the ignorance of the Opposition on economic matters. It is an ignorance that stretches from the shadow Chancellor all the way down to the most humble Labour Back Bencher, who is giggling at the moment.
When we see the figures next week, we will realise that the economy has grown less strongly in the past 12 months than was forecast in the last Budget in November 1994. If an economy is growing less strongly and has plenty of potential for further growth, as this one has, lower interest rates are the appropriate mechanism to use. During the year, we have heard arguments from the Governor of the Bank of England that interest rates should be kept high and pushed higher. Those were misjudgments and I am glad that the Chancellor overruled him.
That also shows that the Bank of England is not yet ready for independence. Before one makes fundamental changes to institutions, one must be confident about those changes, and the Bank of England is not in a state to be independent. For an independent bank to operate successfully, it must have a strong collegiate approach, and the Bank of England is many years away from achieving that.
We do not need to see next week's Budget to realise how strong the deflationary pressures still are in this economy. We only have to look at the results of a major retailer, such as Sainsbury, to find that that company is under tremendous pressure to keep prices down in the high street. Those are competitive pressures.
Look at the latest figures on stock building. Many businesses have built up stocks in the past quarter and have probably done so to a higher level than necessary. If they are to release them into the economy, they will have to be sold at very competitive prices.
We heard a lot of nonsense about the privatised utilities from the shadow Chancellor. The Opposition want to concentrate on one issue, directors' pay, but we must consider how the utilities are operating, and the efficiencies and improvements in productivity that they are achieving.
The shadow Chancellor said that the next electricity privatisation would only result in a £1 billion rebate for the consumer. Under Labour, there would be no rebate because that business, like every other business that has been privatised, would have been retained in the public sector. By releasing those businesses into the private sector, we have provided the mechanism to improve efficiency and productivity. What does that mean at the end of the day? Lower prices for the consumer. That would never have happened under Labour. Those lower prices will continue to come through in our retail price index figures.
Next year we face the prospect of very low inflation levels. I suspect that RPI inflation may well be 1 per cent. What a crowning achievement for the Government to get inflation back to a level that we have not seen for 40 years. That is the prospect that we are holding out to the country. With inflation at that level we could also have significant reductions in interest rates. Low inflation and low interest rates—that is the recipe for economic success in the United Kingdom. They provide the scope for businesses to invest and not the efforts of the shadow Chancellor and his colleagues to build some airy fairy partnership with no economic framework behind it and are positive achievements that will get the economy moving at full steam, and there is plenty of scope for those during the coming year.
There is still only one party that can provide the leadership that this country needs and one party that understands how the economy works. I have no doubt that my right hon. and learned Friend the Chancellor of the Exchequer will present a confident Budget next week, which will lead to firmer control of public expenditure and produce tax reductions and lower interest rates. That is the recipe to ensure that consumers, investors and business men achieve their full potential and that Britain takes all the opportunities in the global economy that are available to it under this Government.

Mr. Jimmy Hood: The hon. Member for Milton Keynes, South-West (Mr. Legg) started his speech by being delighted at the prospect of another 18 months of this Government. He went on to make a speech that made him sound like a man in a condemned cell who is delighted with a reprieve. He might be delighted if he gets 18 months, but at the end of the day the condemned man will come out of that cell and will be no more.
I compliment my hon. Friend the Member for Dunfermline, East (Mr. Brown), the shadow Chancellor, on an excellent speech and on his imaginative and refreshing approach to Labour's quest for fairness and social justice.
I heard some comments from Conservative Members about reviewing history. Some of them were trying less to review history than rewrite it. I especially welcome the commitment of my hon. Friend the Member for Dunfermline, East to taxing millionaires who evade tax—something that Conservative Members do not want to talk about.
I also welcome my hon. Friend's decision to impose a windfall tax on public utilities. Let us remember that we are talking about what were good public industries, which were taken out of public ownership and turned into private monopolies and which have made millions of pounds of profit off the backs of the consumer. Directors dip their dirty snouts in the trough of sleaze and we do not hear one word of criticism from the Tories.
I particularly thank my hon. Friend the Member for Dunfermline, East for nailing the lie that this is the Government of low taxation. I welcome his initiative on the 10 per cent. rate of tax for the low-paid. He has caught the Conservatives out on that. If the Chancellor of the Exchequer's response to the shadow Chancellor's speech proved anything, it was that the Government are rattled by my hon. Friend's initiative. I compliment him on that.

Mr. Jacques Arnold: Will the hon. Gentleman give way?

Mr. Hood: No, I will not give way. Conservative Members did not let me intervene earlier and the hon. Gentleman was shouting and making noises, so he can sit down.
We know that the Government's real agenda is to cut taxes next week as a bribe for the general election. However, we know, as night follows day, that the real agenda is to get over the election if they can and then hype the taxes up again. I have heard some wonderfully interesting things tonight. The hon. Member for Ryedale (Mr. Greenway) spoke about needing to put money back through tax cuts into the pockets of consumers, but who took the money out of their pockets? Who increased income tax by 7 or 8 per cent. since 1992? Then Conservative Members stand up and say that we need to put money back. Conservative Members have robbed the taxpayer and wasted the taxpayer's money, but what do we hear from them—that they are the party of good management. As the opinion polls show, we are about to see what the people think of the party of so-called good management.
I want to discuss economic and monetary union and, in particular, the single currency. I share some of the concerns about the convergence criteria laid down by the

Maastricht treaty. However, in response to the discussions on the single currency that we have had during the debate on the Queen's Speech, I should say that I am no believer in throwing the baby out with the bath water. Unlike the Government's response, which is driven by a right-wing agenda from the right-wing sceptics, Labour's response is constructive, correct and in the national interest.
In my capacity as Chairman of the Select Committee on European Legislation, I am fortunate to meet politicians from other member states as they visit this country and I visit theirs. There is equal concern in those countries about the single currency and monetary union. However, the Government are keeping us out of the debate because they are, sadly, the Government of the opt-out and the lock-out. They are locking us out of a constructive part in the debate that needs to take place in Europe about a single currency.
I shall give an example of the responses that I have had from politicians from other member states—especially new member states. A few weeks ago, I visited Finland and Sweden, which have had different experiences since joining the Union. In Finland, food prices have gone down 10 per cent. and in Sweden they have gone up by 10 per cent. That had something to do with the state of their economies when they joined the Union. They are equally concerned about the impact of monetary union but they are keen to be part of a single currency if it happens. That is the opposite of the Government's position. The Government are not taking part in the constructive debate.
The Government and the sceptics sometimes say that the single currency is a matter of sovereignty. I have never been persuaded by that argument. Where was the Government's concern about sovereignty when they imposed the poll tax on Scotland a year before they imposed it on England? There was no mention of the sovereignty of the Scottish people because we did not want the poll tax. The Government knew that but it was shoved down our throats and down the throats of England and Wales the next year. There was no question of sovereignty then. It was a case of, "This is Parliament. This is where decisions are made. We are the Government, we are going to have it whether you like it or not."
What was the effect of the poll tax? We have heard a lot about the plight of the taxpayer. It cost the taxpayer £14 billion to bail the Government out of the poll tax—the equivalent of £300 per man, woman and child. This is the same Government who tell us about sovereignty. We are not going to forget the poll tax or the Government who imposed it. When the general election comes, the Government will find that out.
Let us consider the exchange rate mechanism and whether we should go back into it. I remember how and when we went into the ERM. We went into it because the Prime Minister was corralled at an intergovernmental conference by the then Chancellor, Lord Lawson, and the then Foreign Secretary, Lord Howe, and threatened with their resignation if she did not join the ERM. She agreed but, as an act of spite to get her own back, she took the country into the ERM with a grossly overvalued pound. She wanted to impose her tool of high interests rates to keep inflation down as an act of spite. The million householders who now live in negative equity know the impact of that economic policy, because it was that single


act, more than anything else, that hyped up interest rates and the problems of home owners. It is important that we remember that.
Conservative Members do not want to discuss the time when the right hon. Member for Kingston upon Thames (Mr. Lamont) was laughing in his bath. The former Chancellor of the Exchequer was singing in his bath just after he had wasted £15 billion in one day trying to prop up sterling and increased interest rates by 50 per cent., from 10 to 15 per cent. He went to his bath, had a glass of champagne, laughed and said how relieved he was. The British taxpayer carries that burden to this day. That is the burden that we are going to leave on the Government. When the general election comes, we will not rewrite history in the way that I have heard it rewritten tonight; we will remind people about the history of the Government and it is that history that will defeat them.

Mr. Jacques Arnold: I find the comment of the hon. Member for Clydesdale (Mr. Hood) on the exchange rate mechanism rich. I sat in this Chamber when the Conservative Government decided to join the ERM. I heard the Opposition spokesman say not only that we should be in the ERM but that we should be in the narrow band. If it was a fiasco that cost the sort of money suggested by the hon. Gentleman—that is disputable—we would have had that loss and very much more had there been a Labour Government at the time.
That is exactly the sort of the comment we had from the shadow Chancellor earlier this afternoon. I wonder how many hon. Members timed the shadow Chancellor. He took 43 minutes and his speech was an absolute smokescreen because there is a total lack of economic policy laid down by him on behalf of the Labour party.
The hon. Gentleman spent nearly 50 per cent. of his time on the subject of corporate governance—that is the correct name for it. We may ask why. The reason ties in with the Labour party's obsession with the politics of envy. The hon. Gentleman wallowed in what he called sleaze for an immense amount of time. He talked about top people's pay and perks and he offered us no solution. Why? The reason is that these issues are very complex and quite beyond his tiny mind. Nevertheless, they are important. They must be dealt with and that is precisely why my right hon. Friend the Prime Minister appointed the Greenbury committee to go into the matter in the greatest detail. Such matters should be got right because they are a serious problem, but one to be solved by the stock exchange, by corporate investors and by the shareholders who are the very people who are being ripped off.
The matter is complex, and it is no wonder that the shadow Chancellor did not dare to tackle it. The Greenbury committee itself got it wrong. It declared on Monday and by Thursday it admitted that it had got it wrong on a matter of detail which hit ordinary people. To suggest that the matter is simple is wrong; it is not and it must be tackled properly.
For most of the remainder of his speech, the shadow Chancellor ran down Britain. He mocked the way in which this Conservative Government coped with the recession. The problem was serious because we faced the worst recession since the 1930s. Our tax revenue was down. How did our Conservative Government respond to

that? What did their predecessors, the Labour Government in the recession of the 1970s, do? They cut spending, they scrapped the hospital building programme, they cut the pay of nurses and they axed the pensioners' Christmas bonus. Is that what Labour would recommend to deal with the problem?
This Conservative Government stuck to their growth programme in education. We are now spending, over and above inflation, more than 50 per cent. more per pupil on our schools. We are spending, over and above inflation, more than 60 per cent. more on our national health service. The Government safeguarded the pensioners from inflation right the way through the recession.
Let us remember what the Labour party did to the pensioners. Labour changed the basis of calculation of the uprating to earnings and away from inflation. Why? The reason was that earnings lagged behind inflation under a Labour Government. They thought that the pensioners should be hurt as much as the rest of the public.
We kept up our spending increases on health and education and we safeguarded the pensioners. How did we do it? We borrowed. Why could we borrow? We could borrow because Conservative Governments have a sound reputation for sound finance, unlike Labour Governments. We should remember that the Labour Government of the 1970s could not borrow in the markets because of their rotten reputation for unsound finance. They had to go with a begging bowl to the International Monetary Fund. This country queued up with third-world countries at the IMF. Is that the kind of Government to whom the Labour party wishes us to return?
We kept our reputation. How did we do so? We kept our reputation because we demonstrated how we would close the deficit in Government finances. We have cut spending plans by £45 billion in the past two years or so and we also increased tax. I hear Labour Members gloating about increased tax; they believe in it, we do not. However, responsibly, taxes had to be increased without flinching despite the unpopularity of that move.
We are now through that phase. We had 4 per cent. growth last year, and our economy is growing faster than that of France, Germany and Italy. Our inflation rate, which has been under 4 per cent. for three years, is the best for a generation. Government spending is under control and unemployment is down by 710, 000 from its peak. In my constituency of Gravesham, it is at its lowest since April 1991.
We should compare those figures with our European partners. Unemployment is serious and rising in France. In Spain, 20 per cent. of the work force are unemployed. Under Spain's socialist Government, who abide by the social chapter, 30 per cent. of young people are unemployed. Is that what we want? The whole gamut of economic indicators, be they exports, investment, manufacturing output or consumer spending, is steadily increasing. If all is going so well, where is the feel-good factor? Why is it not yet here? The reason is the tax impact on the working family, the burdens on enterprise and the massive hangover from which the property market is suffering following the 1980s which hit the value of people's homes.
I shall now deal with the tax impact on the working family. It is a fact that since 1979, for a single person earning, the tax burden has gone down by one tenth. Organisation for Economic Co-operation and


Development figures show that the tax and national insurance burden on the single earner is 26.5 per cent., which is slightly higher than the figure for the United States, but way below European Community levels. Our tax burden on the single earner is very much lower than that of our European partners.
However, the tax burden on the married couple has shown no reduction over that period. In Britain, there is a 24.1 per cent. burden of tax and national insurance. That is very much higher than the figure for the United States, with its 19 per cent., and very much higher than the figures for France, Italy and Canada. We have a higher tax burden on the family than is the case in any of the other G7 countries, bar one.
We should redress the balance in this Budget. We in the Conservative party believe in the working family, which is the bedrock of Britain. With the economy growing the way it is, now is the time to look at how we should put back the money in the taxpayer's pocket, whence it came in the first place. We should restore the married couple's allowance to the standard rate band, which would cost the Exchequer £2.4 billion, but there should not be an increase in the additional personal allowance for single parents with children other than those who are widowed, thus providing a disincentive to illegitimacy and divorce.
We should introduce a capacity for non-working mothers to transfer their basic allowance to their working husbands. In 1993–94, there were 9.1 million male married taxpayers and 5.8 million tax-paying wives. That would suggest that 3.3 million wives could transfer their allowances, providing their families with young children with a tax saving of 25 per cent. on the basic allowance of £3, 445. That would mean a saving of £861 in the pockets of families, which would have a significantly greater impact on the less well-off earning families. We should concentrate on that idea.
We must also concentrate on doing everything to support enterprise. What made this country great? It was our entrepreneurs who went out into the world to trade and invest. After all, the flag followed trade. That investment abroad is having a massive impact on our cash flow balances into this country. We are the biggest investor in the United States. We are a major player in the international markets and those investors should be supported. Next week's Budget is the opportunity to start giving back to people their own money. We should target families, small businesses and home owners.

Mr. David Hanson: You will have to excuse me, Mr. Deputy Speaker, if I refuse to take lessons from the hon. Members for Gravesham (Mr. Arnold) and for Stockton, South (Mr. Devlin) on Labour Governments in the 1960s and 1970s. I grew up under those Governments with job security in my father's household and in a house built by a Labour Government. I went to university without having to draw a student loan and I had job security when I left university. I want a return to those days for the people whom I represent. I do not want any lessons about Labour Governments from the hon. Member for Gravesham.

Mr. Jacques Arnold: Will the hon. Gentleman give way?

Mr. Hanson: The hon. Gentleman can sit down because we are on a 10-minute limit today.
The Queen's Speech and the Chancellor's speech today are missed opportunities. The Chancellor is living under a delusion and the Government are masking their failures. The economy is not as the Government would like to think it is. The Gracious Speech mentions the need for economic growth, rising employment and low inflation. No Labour Member would disagree with that, but there is a need for the Opposition to look at whether the Government's achievements to date bear witness to what they are trying to achieve in the future. From where I sit, the Conservative party is living on another planet.
The Conservative party proclaims itself as the party dedicated to reducing the benefits bill. When my party left office, one in 12 people were dependent on benefit, but now it has risen to one in six. The Conservative party claims to be the party of low taxation, yet when my party left office average family taxation was 32.2 per cent. of gross income—now it is 35.6 per cent. As my hon. Friend the Member for Dunfermline, East (Mr. Brown) said, since the last general election income tax rates have risen effectively by 7p. Only those earning more than £64, 000 are better off as a result of the Conservatives coming to power.
The Conservative party claims to be the party of home owners, but between 1990 and 1995 some 295, 000 people have had their homes repossessed. This very year, according to the Government's own statistics, provided in a recent parliamentary answer to me, 850, 000 people are caught in the negative equity trap. The Conservative party claims to be the party of low taxation and home owners and states that it is dedicated to reducing the benefit bill, yet, when difficult choices must be made, it remains the party that hits the poorest people in our community. The poorest 10 per cent. in our community are now 17 per cent. worse off than they were under the Labour Government, while the richest 10 per cent. are now 62 per cent. better off than they were when my party left office. One in three children are now living in poverty, yet in 1979 the figure was one in 10.
Those figures show that the Conservative party's economic philosophy has not only failed but caused great economic and social damage to our community. As the years and months progress, the resulting tab is crippling our future economy. Unless a radically different approach is adopted, nothing will change.
We are failing to invest in our local community. We invest half as much as Japan in our local community. We invest £863 less per head than the United States. We invest £2, 766 less per head than Switzerland. Even Portugal has a higher rate of investment per head than the United Kingdom.
The unemployment rate is double what it was when my party left office. Today, 800, 000 people have been out of work for more than one year at a cost of £20 billion per year. What a drain on our economy. In my region, Wales, 106, 000 people are currently out of work. Unlike the claims of various Conservative Members today, the unemployment rate in my constituency has risen by 36 per cent. between 1990 and 1995. Many of the jobs that are offered in my constituency are low-paid, part-time, insecure and available on short-term contracts. They are doing nothing to build a strong future economy. One in six people remain out of work in my constituency; 18 to 24-year-olds account for 650, 000 of them.
All that unemployment has been created in the pursuit of low inflation. I am sure that my colleagues on the Opposition Front Bench would share the objective of low inflation, but if it is the cause of so much misery and social division, while pushing up the Government's bills on wasteful expenditure, we need to look at that strategy urgently.
Just yesterday I received a press release from Touche Ross, which I doubt is particularly favourable to my party. Robert Ellis of the company's Cardiff office reported that the insolvency figures in Wales in October were the highest ever recorded. He said:
The figure this month is the worst ever recorded for October. You have to go back to January 1992 and the height of the recession for a higher monthly toll of receiverships.
A study of the sectors in which receivership occurs reveals some dramatic figures. In the past 12 months, 52 businesses have failed in Wales; 45 failed in 1994. The miraculous pick-up in the economy has not hit my region.
The sector that has suffered most difficulties and experienced most receiverships in the past 12 months in Wales is construction. In the 12 months to October, 12 businesses failed compared with six in the previous 12 months.
I must emphasise that it need not be like that. The Gracious Speech could have contained measures that won the support of my party, which were designed to boost the economy, meet social need and provide reasonable and decent levels of service in the future. [HoN. MEMBERS: "What are they?"' Money could be allocated to local authorities from their capital receipts to build local council housing for rent. That would mean that the 2, 000 homeless in my constituency would be housed; employment would be offered to building workers; and the local economy would be boosted.
In my borough council area, this year alone £800, 000 capital receipts have been taken and not one penny of them can be spent on local authority housing. That has happened at a time when construction workers are out of work. I know that it has been said before and it sounds old hat, but the basic kernel of truth is that people are unemployed and in social need while money is available that could be spent on social housing.

Mr. Stephen Day: Will the hon. Gentleman give way?

Mr. Hanson: No. Time does not permit me to do so.
One in 12 homes in the United Kingdom remain unfit for habitation. Wales has the greatest proportion of such homes. Money is available that could be spent on boosting the economy, creating jobs and meeting social need.
Further action could be taken. The Labour party has called for more investment in the information super-highway in partnership with the private sector. That directed partnership could provide key investment to create jobs, put people back to work and meet the needs of our society. We support the establishment of regional development agencies, which would create stronger economies in areas such as Wales by allowing them to draw on venture capital funds. We should invest in public transport, the infrastructure and the environment. Many public expenditure programmes could be introduced to create a competitive society that puts people back to work rather than a society in which money is wasted on huge dole queues.
There is much work that we could do, but we must look at the Government's taxation and social policies. My constituents are poorer because of the Government's policies. We need to ensure that taxation is fair. It should not be increased, but it should be fair. The Government will shortly have to choose whether to reduce the capital gains tax and the inheritance tax. They must decide whether to allow £4.6 billion to be cut from those taxes by 1999 or whether to introduce fair taxation, and use that money for productive good. I urge the Government not to cut those two taxes but to consider ways in which we can make tax fairer. For example, we have proposed cuts in the VAT on fuel, which would assist people in my constituency. We have advocated proposals to make taxation fairer.
If there is £4.6 billion to be given away, the Opposition could list community projects on which that money could be spent, and which would create employment opportunities and improve social conditions. In doing so, we would be able to reduce the Government's overall spending on unemployment benefit and other wasteful expenditure.
I want to see fair taxation, a fair programme of investment and—

Mr. Deputy Speaker: Order. Time is up.

Lady Olga Maitland: I warmly welcome the proposals in the Gracious Speech and the Government's commitment to firm financial policies. The Government have shown great courage in standing up against the national tide calling for easy options.
The truth is that our policies have worked. We are witnessing a continual, sustainable growth in the economy. The unemployment rate is coming down steadily. In my constituency it is now down to 7 per cent. and is declining month by month. I have seen new businesses coming on stream—it is interesting to note that many of them are successfully led by women—while established ones are pressing ahead with ever greater confidence than before.
There is, however, an area which in recent years has been an unexpected drain on national resources in both financial and social terms. I refer to the growing breakdown of the family and the consequent costs to the nation—a factor which can only concern my right hon. and learned Friend the Chancellor very much. Total spending on lone parents has leapt from £1.7 billion in 1979 to £9.1 billion for the year 1995–96. That, I should add, is 41 per cent. of our entire defence budget, which has the responsibility of looking after the security of the whole nation.
So not only are broken families creating a disproportionate cost in financial terms, but the cost in human terms is greater. Hence the importance of considering seriously ways to boost the family. We should be doing everything possible to keep families together instead of tearing them apart at top speed, as proposed by the family law Bill.
It would seem that we have reached a watershed in our society. What respect do we have for the institution of marriage? What role does it play in our community? Is it as relevant as before?
The family law Bill is forcing us to have a serious rethink of the type of society that we want. The Bill also poses the question: should Parliament reflect society, or should Parliament shape society? Indeed, should Parliament have a vision for society for us to aspire to?
Parliament has had no difficulty in other aspects in trying to set standards and build up a moral base. How, otherwise, does one bring a country to fight a war? If Churchill had not set the right tone in 1939, who knows how the debate about rapprochement with Hitler, the difficulties with rationing, or body bags coming home, would have ended.
What is for certain is that Churchill recognised that there was no easy option and firmly announced his intention—we had to fight. We added that the going would be tough, with
blood, toil, tears, and sweat.
Similarly, we need to have a vision for our society today, and that means a vision for the family. Nurturing the family also means blood, toil, tears and sweat.
No one can deny the urgency of taking a close look at the family today. This nation has bred a growing disembodied family at the rate of 150, 000 couples divorcing a year—the highest rate in Europe. Add to that the 1.5 million "never married" single parents with 2.5 million children and we become aware of the scale of what is before us.
Are we really content to create more legislation to hasten the process even further? Have we really taken into account the fact that the costs of even more broken families will only be an increasing burden on the state and therefore the economy? History has shown us that divorce has become easier with every piece of legislation that is passed, so more broken families have been thrust into society.
At whose behest is the family law Bill being introduced? Have there been mass demonstrations in Hyde park calling for it? Where are the vociferous lobbies calling for swifter, easier divorce? Have the children, the neglected VIPs in those scenarios, been crying out for yet more rapid break-ups of their homes? The answer is that the Law Commission, in its infinite wisdom, has decided that it would be humane to end marriages swiftly and painlessly and to
reduce the trauma for the children".
That is an escape clause for guilt-ridden parents. The trauma for the children is the break-up of the family home. The legal process is immaterial.
The real issue is the value that we place on marriage in today's society. Only when we come to terms with that can we think clearly about how and when it should end. If we decide that marriage is a short-term arrangement of mutual convenience to two people—with children as an option—then for the secular-minded it is plain logic that, when it falls apart, it should be ended as expeditiously and seamlessly as possible.
However, there is another opinion. Marriage is the foundation stone of society and it carries with it responsibility. Stable families bringing up children in emotional security can only be of benefit to society as a whole.
Marriage is not merely a contract between two people. It is a contract witnessed by society on behalf of the community at large. We are not farmyard animals. We do not approve of people living by an amoral code. We govern our lives according to an accepted framework, which seems to work pretty well. Breaking the law is an offence. We pay our taxes. We drive on the correct side of the road and so on.
Marriage, however, which is the bedrock of our society, seems to have no such boundaries. When it breaks down, it is a misfortune for the couple concerned. The reasoning, "Why keep a dead marriage alive?" means a hasty divorce, which, under the new proposals, will move from speedy to complete overdrive.
What really disturbs me is that, while the debate has raged in the past few weeks, I have heard scant concern expressed about the children's well-being. The oft-repeated phrase, "They are very understanding and adult" does not wash. It reflects self-absorbed people seeking to gloss over an inconvenience.
In truth, the children pay a heavy price. If one asks any teacher about the problems of dealing with distressed children whose parents have split up, one will hear of children, if small, becoming clingy and attention-seeking. In any case, they lose confidence, cry easily, lose concentration and fall back in class. Later, some never settle down. They fall out of the social swim and turn to crime, drugs, early pregnancies and so on.
Study after study has demonstrated the ill effects of divorce on children. So prevalent is the break-up of the family that another nightmare falls on children, as emphasised by Ruth Deech, principal of St. Anne's college, Oxford and a specialist in divorce and family law. In a paper on Lord Mackay's proposals, she drew our attention to a MORI survey for Reader's Digest last month, showing the fear held by many children that their parents will separate, and the years of longing on the part of those children whose parents have parted that they will be reunited.
Medical Research Council studies carried out over decades have shown that children whose parents divorce have less good life chances—poorer health, fewer jobs, more children born out of wedlock. They are less likely to finish school and have more broken marriages in the next generation, with all the resulting social security costs borne by the taxpayer.
Under the proposed new law, marriage will be ended with less formality than the hiring of a car: if you do not like the spouse after all, send her home. That bedrock of our society, marriage, from which everything flows in a civilised world, will be irretrievably damaged if we surge ahead at break-neck speed to end in a single year a commitment that had been made for life.
If nothing else will move liberal-minded thinkers, I beg them to consider the hapless victims—the children who have no say in the matter. They suffer, and in the end so do we all.
I urge the Chancellor to give very careful consideration to the growing costs of increasing broken families, and make his own representations to the Lord Chancellor, whose Bill will do so much to undermine his own excellent work in securing a firm financial base for the country.

Mr. Andrew Miller: It is


always a pleasure to follow the hon. Member for Sutton and Cheam (Lady Olga Maitland) because it brings us back from "Alice in Wonderland" to the real world. I often wonder, when I drive through Sutton and Cheam occasionally, in which part of Sutton and Cheam the hon. Lady finds those examples, because I do not believe that people in her constituency accept her model of the world.
It is curious that the debate on the royal speech has not received a great deal of press coverage. We all know the reason for that. A friend of mine suggested to me that the hon. Member for Crawley (Mr. Soames) is on the carpet in front of the Prime Minister for daring to attack the Princess of Wales. She kept the Queen's Speech out of the media.
However, some serious things have been discussed in the past few days and it is a great pity that the debate has not had a great deal more coverage.
Let me start with nursery education, the bedrock of our investment in the future, in people, in our society.
What has happened? There was a pilot scheme for vouchers—the Government decided to start with a pilot scheme for a change. After all the experiments in social planning had gone disastrously wrong, perhaps the Government thought that it was a good idea to have a pilot scheme instead of going full blast into a new programme that collapses in disarray. What was that pilot scheme? It was offered to local authorities to take up. Time after time we have heard criticisms of Labour and Liberal-controlled local authorities for failing to take up that programme.

Mr. Jacques Arnold: Quite right.

Mr. Miller: The hon. Gentleman says, "Quite right." That is interesting—perhaps he can say why Conservative-controlled Cheshire county council also refused the pilot scheme. It refused the scheme because it was bound to fail—

Mr. Arnold: Will the hon. Gentleman give way?

Mr. Miller: I shall not give way as the hon. Gentleman does not represent Cheshire.

Mr. Arnold: rose—

Mr. Miller: Oh, very well. I shall give way.

Mr. Arnold: Cheshire county council did not take up the scheme for precisely the same reason as can be clearly seen in Kent. We have always pioneered projects; the only time that we did not do so in my county of Kent—which is one that I know about—was precisely because it is controlled by Labour and the Liberal Democrats, who are under instructions not to participate in the scheme. Poor old Kent.

Mr. Miller: The hon. Gentleman is clearly not listening. Cheshire county council is one of the last bastions of Conservative administration and it refused to adopt the programme.

Mr. Peter Butler: Cheshire county council is not Conservative-controlled.

Mr. Miller: Cheshire is Conservative-controlled; I represent a Cheshire constituency, so I should know.
The Conservative party has rejected the pilot scheme. The issue needs to be considered in terms of the overall programme of investment in education which is not taking place throughout that county. It is interesting that there is an all-party alliance—all three major parties working together to seek to persuade the Government that they are wrong. That is an interesting little concept about which we never hear from the Conservative Benches. All we ever hear are criticisms of Labour-controlled authorities which are seeking to do their best in impossible circumstances.
Earlier we heard about one aspect of investment. I listened briefly to the contribution of the hon. Member for Stockton, South (Mr. Devlin) who criticised the Labour party for having discussions with British Telecom. He has the gall to criticise the Labour party for talking about investment in the nation's future. It seems extraordinary that, when the Labour party starts to promote ideas that will create competition, it becomes the subject of criticism from Conservative Members.
Last year, we heard the Deputy Prime Minister, on his crusade for deregulation, say that every regulation had to be wiped out of industry's way. But when it comes to British Telecom, he says that the asymmetry rules must stay in place. Those rules were devised in 1984, when they may have had some logic—history will determine whether they did—but by the time those small cable companies were taken over by American multinationals, the logic had disappeared. There must be an agreed and phased programme of release from those regulations on a region-by-region basis, which is what the Labour party was saying. It is extraordinary that a mechanism to create greater competition in one of the industries that will provide the basis for the regeneration of the British economy has been criticised by Conservative Members.
On several occasions I have heard criticisms of industrial relations under previous Labour Administrations. I have heard the phrase "Red Robbo" used about six times—it must have been in a Conservative party handout which I have not seen. I met a group of trade unionists from Slovakia just yesterday who were complaining bitterly about the problems they faced in making progress with some of the multinational companies in their country. I asked them specifically, as did my hon. Friend the Member for Coventry, North-East (Mr. Ainsworth), how they ensured that trade unions were recognised. They said that it only took five people to be in the union and it would be recognised. In this society we have destroyed all rights of recognition.

Mr. Butler: Hear, hear.

Mr. Miller: The hon. Gentleman says, "Hear, hear." We have destroyed all rights of recognition and the Government now claim that as the basis for making progress. How can removing rights at the workplace be the basis for progress?
We have heard about transport issues. In my constituency, large and successful businesses are desperately crying out for investment in the west coast main line. Two Budgets ago promises were made. It was


said that magical private sector money would rescue the west coast main line. Where is it? Not one penny piece of that money has emerged so far. How can businesses such as Shell, Vauxhall and Kemira, which desperately want to get to the market place by improving the rail infrastructure, he expected to make the sort of contribution that they could have made had that investment gone ahead?
My hon. Friend the Member for Delyn (Mr. Hanson) talked about the failure to invest in housing. In my constituency, 4, 500 families are on the housing waiting list—an extraordinary number. An authority that as recently as 1986 could guarantee to any family—

Mr. Stephen Day: On a point of order, Mr. Deputy Speaker. I wish to be helpful to the hon. Gentleman, who has I think misled the House—I am sure not intentionally. Cheshire county council is Labour-controlled. Perhaps the hon. Gentleman would like to correct what he told the House.

Mr. Miller: I stick to my guns, and the record will prove that.
Investment in housing is important. Some 4, 500 families are waiting on the housing register in my constituency. As recently as 1986, a couple with one child would have been housed within one month; it now takes four years. That is as a direct result of this Administration's failure to invest in the housing infrastructure. The money is there and only if it is released on a phased basis will we achieve progress in providing low-cost, affordable housing. Such investment will result in the sort of progress that we need to house those people and revitalise the building industry. That would have an enormous spin-off effect on a wide range of industries across the country.
Everyone who drives up the motorway or travels on the train through Bedfordshire will see the problems faced by industry—

Mr. Deputy Speaker: Order.

Mr. Stephen Day: I shall take the opportunity, at the beginning of my speech, to give the hon. Member for Ellesmere Port and Neston (Mr. Miller) the information to allow him to correct what he said. I am a Greater Manchester Member of Parliament, but my postal address is Cheshire and my understanding is that the Conservatives hold 22 seats, Labour 35 and the Liberal Democrats 14 on Cheshire county council. It is only right to put those facts before the House. I should like to think that such circumstances led to Conservative control. If they did, we would be in control of many authorities.
I welcome the Loyal Address. During the debate this evening, many Labour Members have done nothing but run Britain down. I think that my Whips will agree that, on occasion, I have rebelled when I did not believe that my Government had got it quite right. However, it should not be inferred that I, or any other Conservative Member who has occasionally disagreed with the Government, believe that the Conservative Government have been anything but good for the British people since 1979.
I do not recognise the picture that Labour Members have painted of Britain before 1979. I went to school and on to further education during the 1960s, and I remember Labour Britain well. It is an experience that I do not wish to repeat. I remember a Britain where industry created more jobs than there are now, but unfortunately—especially for those who ultimately lost their jobs—that industry produced goods that the rest of the world did not want to buy at a price that the rest of the world could not afford. That reality, and not Conservative Government, cost people their jobs.
Companies struggled under the economic regime imposed by a Labour Government and many industries were put under public ownership. I remember well companies such as British Steel and British Leyland that were cobbled together by a Labour Government. They were a disaster for their own long-term future and a disaster for all who worked in them. The companies were almost destroyed. It was a Conservative Government who privatised those industries and turned them into successes. They are the real benefits of Conservative Government for Britain since 1979.
I remember when the Labour party went to the International Monetary Fund. It would embarrass anyone with pride in Britain to see any Government of any political persuasion grovelling before the IMF, with the economy in a mess. I remember an inflation rate of 27 per cent. in Britain. I remember that at one point the highest rate of taxation reached 97.5p in the pound. That is a typical result of Labour attitudes to taxation and to the economy. Labour policies produce not growth but the devastation that was Britain in the 1970s. I do not believe that the British people wish to return to that situation. They will reflect upon that in the polling booths, and vote accordingly.
There were calls for local authorities to be allowed to use receipts from council house sales to invest—that is a magic word beloved of Labour Members. Labour Members do not seem to understand that the proceeds of council house sales must he offset against the massive debts incurred by local authorities. Local people face enormous cost burdens largely because of the mismanagement of Labour-controlled authorities. The debt burden is enormous, and the Labour party cannot ignore that if it claims to believe in financial rectitude and good management of the economy.
Labour has proved again tonight that it is unfit to run a market stall, let alone an economy. It does not understand what wealth creation is all about. People have the talents and the Government must release those talents so that the people can create wealth. The people do not need politicians to direct them. The last thing they need is a Labour Government trying to control the economy, telling people how to spend their money and telling businesses where to invest. The people will make the right decisions in that regard. This Loyal Address proves that the Conservative Government hold basic, clear principles that are right not only in theory, but have been proved right in practice ever since the Government were elected.
I am proud to be a Back Bencher in this Conservative Government. Much mockery was made of an earlier comment that this Parliament may yet run 18 months. However long it runs, I hope that, at the next election, the people will do what they have done in the past, in spite of the pollsters' predictions: return a Government who are capable of running the economy.

Mr. Brian H. Donohoe: The hon. Member for Cheadle (Mr. Day) said that he was a product of Labour and, judging from his speech tonight, he has not done too badly.
The Gracious Speech is paper thin as far as Scotland is concerned; it contains nothing of any meaning for Scotland. Two days after the Queen's Speech, the Secretary of State introduced a hare-brained scheme to engender some alternative to our well-thought-out proposals for a Scottish Assembly. The Government have no idea about the future of Scotland—the land in which I was born and which I shall always be proud to represent.
The Government cannot deal with the education problems in Scotland. Many children in Scotland, who receive little education and no training, find that there are no jobs in Scotland. Education without training and jobs is worthless. As a result, we have seen a rising culture of drug taking and crime in our society. The Government are responsible for those problems; no one could suggest that it is the fault of anyone else. I see those problems in my constituency and they exist throughout Scotland.
There is no point in trying to encourage the youngsters in our communities if we cannot provide them with real training. A company has recently commenced operations in my constituency and it has brought a number of jobs to the area. I visited that company a few weeks ago and I met the owner. He told me that he is not able to fill the positions in that factory because of a lack of training. He has plenty of desks and machines, but he does not have bodies to operate those machines.
That lad was conned by the Scottish Office and by Ayrshire Enterprise about the number of suitably trained people in the Ayrshire area. He has had to consider bussing people from the north and the east to the south of the county. He could employ 100 people tomorrow and meet his production requirements, but he cannot recruit suitable workers because of the lack of training in the local area. That problem should have been addressed before now.
We must also contend with the ill-thought-out reorganisation of local government in Scotland. The constraints that will be placed on the resources of the new authorities are now coming to light. The Government have not given the new authorities any assurances that their financial requirements will be met. Education and training needs have not been addressed. There will be immense problems in social work in respect of achieving any possible attachment to the needs of my constituents. That is another clear sign of an incompetent Government who have nothing to offer the people of Scotland.
We are also witnessing the breakdown of the national health service. I was born the year that the national health service came into being and, in the final years of the current Government, it is breaking down completely. Nothing is left of the dreams of those who created the national health service.

Mr. Jim Cunningham: Does my hon. Friend agree that one of the problems in the national health service that the Government have not addressed—it could be argued that they have exacerbated

it—concerns the long hours worked by nurses and doctors in the national health service and their lack of incentive to do a good job?

Mr. Donohoe: My hon. Friend is absolutely right. While nurses, and other staff, are restricted to pay rises of some 3 per cent. per annum, general managers in the trusts and the health boards of Scotland award themselves increases of up to 25 per cent. There is something fundamentally flawed in a system that allows that to continue. The issue clearly needs to be addressed, and it is not likely to happen under any circumstances where we have a Tory Government.
In my constituency, what I understood to be a national health service is being broken up ant private hospitals are running almost all geriatric services. If the Tories thought that they could get away with it, they would privatise the birth of children. I am not so sure that that is not the next option that the Secretary of State for Health will consider.
My constituency also has problems with housing. The development corporation in the new town was enormously successful for 25 years. It created jobs and wealth, it attempted to address the lack of training in the area and it built particularly good housing. All that achievement has been lost because of the Government and their madcap ideas. They want to diversify the housing stock. They do not want the same as the public.
The tenants living in those houses want to be transferred to the local authority. That was proved by clear experience in other new towns in Scotland. A ballot revealed that 97 per cent. of people in East Kilbride believed that the only useful alternative to their continuing in the rented sector was to transfer to the local authority. [Interruption.] Does the Under-Secretary of State for Scotland, the hon. Member for Aberdeen, South (Mr. Robertson) want me to give way? Clearly, he does not understand his own brief, because he has never answered the points that I have raised with him in Scottish Questions.
Why should so many resources—some £350 million—be wasted on a housing association in Irvine when nobody seems to know whom it represents? Why should all that money be spent trying to entice people away from what they know is good for them to the unknown—away from secured tenancies to assured tenancies? My constituents will not be conned.
In the past 16 years, what have we gained from a Tory Government? We have experienced growth of some 1.7 per cent. How can we possibly compete in the world market when we are hitting such a growth figure? Earlier this evening, I had a discussion with representatives of ICI, which is a very successful company. It is not so successful in my constituency, where its employment figures have fallen from 13, 000 jobs in Stevenston to some 600 today. That does not suggest that the country has encouraged ICI to continue as an employer in my constituency.
Politicians on both sides of the House do not understand what is happening in the commercial markets of the world. Commercial companies have become transnational. Individual companies do not concern themselves unduly with what politicians have to say. Instead of all the discussion about sleaze, and Conservative Members taking money for advising industry on how to go about its business, we should look


at industry to learn something about how we should conduct our business in politics. Clearly, Britain is old fashioned in that respect. We have to turn ourselves around and adopt an agenda that people on the streets understand and that will get them all back to work.

Mr. Thomas Graham: I have a new pair of glasses and, as they are bifocals, I am having some difficulty in using them.
I found the Queen's Speech extremely difficult to understand. It is quite extraordinary, to say the least, given the problems facing Britain and those facing my constituents. In the past fortnight, I have looked at my mailbag and I shall tell the House what was in it—not the Queen's Speech, but letters from people who are deeply worried about the effects of the Child Support Agency on their families. My constituents have undergone traumatic experiences and are still writing to me about their unsolved problems.
I also received a number of letters about transport. The Government's deregulation of the buses has caused enormous problems in rural areas. My constituents are finding it difficult to get to work in the morning and back in the evening because of the lack of bus services. Not everyone owns a motor car; therefore public transport is extremely important. Those are the issues about which I find letters in my mailbag.
Once again, there are tremendous problems with the national health service in my constituency and that of my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman). The waiting lists are unbelievable. There is a waiting list of between nine months and a year for a man with a heart problem. He should be seen this week and treated immediately so that his problem can be cured. Those are the issues that folk want to see in the Queen's Speech. They want my constituent to have an operation on his heart. They want the waiting list to be cut effectively, not a manipulation of the figures.
My folk are worried about young people. The Under-Secretary of State for Scotland, the hon. Member for Aberdeen, South (Mr. Robertson) is nodding his head, but education in Scotland is his portfolio. I know young folk who want to go to college but cannot get the wherewithal to do so. The local college does not receive Government support, so young people in my area are being denied the right to take themselves off the dole and to seek further education.
One young girl in my constituency who is an incredible asset to Scotland—she is a great actress—has been offered a place in a college in England, but she cannot get funding. So what will happen to her? Her family cannot afford to send her to college, but the Government can. They should pay for young kids to go to college. Those are the measures that we should see in the Queen's Speech.
I remember the last time I read a poem out of a certain book. I wish that the Chancellor were here tonight, as I am about to read another one. This is from "Hairy Knees and Heather Hills" by the famous Walter McCorrisken. Walter sums up the Government in this wee poem.


"A miser from downtown Rangoon, 
Drank soup through a hole in a spoon.
Said he with a smile, 
It's really worth while, 
For the soup I save is a boon."

That epitomises the Government, how they operate, and the Chancellor's regime. The Government do not realise that they must spend money to get Britain out of its problems. Providing employment for young people takes money and investment in education and training. That is the way forward.
The Queen's Speech should have given hope for Britain, and it should have given young folk pride, knowing that they would leave school, college or university and go into training that would give them a job. I make no bones about it. Every Member of Parliament has a job. Some do it well and some do it badly, but that makes no difference because we all collect a salary. Too many young graduates and other decent young men and women who have worked hard to pass their college exams to make a contribution to society are denied that opportunity by the madness of this Government.
After 16 years, the Tory party is still putting out bumf, such as a circular that I saw this week. I am sure that all Conservative Members have a copy. If not, I will make sure that they receive one. That circular says that Government's key objective is a centralist strategy aimed at not risking inflation, and at ending the days of boom and bust. After 16 years, the Government have the audacity to produce something like that, while constituents of mine—young people who have only ever seen that lot in government—are, through no fault of their own, languishing on the dole The Queen's Speech offers them no hope and nothing for the future.
I shall quote another poem from Walter McCorrisken:

"Dear Sir, 
Never bite your finger nails, 
It makes your fingers lumpy, 
Never bite your finger nails, 
Yours sincerely, Stumpy."

That further reminds me of the Government, who are worried because they know that a general election is coming. They know also that the next Queen's Speech will be meaningful. They know that that Queen's Speech will offer young people the hope of carrying the flag and offer elderly folk in retirement a chance to enjoy a decent standard of living. If the Government do not look after the young, there will be nobody to look after the elderly.
The Government have abandoned their commitment to young people. Worse still, this week I received letters from elderly people asking why the Government could not put something in the Queen's Speech about abolishing value added tax on domestic fuel. Why could not the Queen's Speech have offered the elderly some hope this winter?
I remember the winter of discontent, but this winter many old folk will not wake in the morning. There will be a tap on the door that they will never hear. Eventually, the police or social worker will be told but, unfortunately, those elderly people will have a died because they did not have enough to heat their homes or to eat. They are forgotten individuals. That is the winter that those old people are facing.
The Queen's Speech did not talk about the young, the elderly or the future of Britain because the Government have abandoned them all in favour of the pathetic policies of a dyed-in-the-wool, heartless Government.

Hon. Members: More.

Mrs, Ann Taylor: I understand hon. Members' wanting to hear more from my hon. Friend the Member for Renfrew, West and Inverclyde (Mr. Graham). His speech was direct and came from the heart. They would do well to listen to his underlying message.
We have had a wide-ranging debate, touching on

Mr. Robert G. Hughes: Will the hon. Lady give way?

Mrs. Taylor: I have only just started my preamble, but I shall.

Mr. Hughes: I am grateful to the hon. Lady. She played a leading part in changing the Standing Orders, particularly those relating to the declaration of hon. Members' interests. Perhaps this was an oversight, but I fail to understand why the hon. Lady—unlike her party's Chief Whip and deputy leader—has not declared an interest in one of the amendments tabled by Labour. The hon. Lady has a relevant interest but she has not declared it.

Mrs. Taylor: The hon. Gentleman should withdraw that remark because I have no interest relevant to the debate. Those names shown with the letter R against them have been so identified after the procedure was cleared with the Parliamentary Commissioner for Standards. Labour Members are clear about the rules. If the hon. Gentleman has any questions, he should not raise them in the House but with the parliamentary commissioner. I assure the hon. Gentleman that his allegation is incorrect and I invite him to withdraw it.

Mr. Hughes: The hon. Lady says that, but she nevertheless has an interest that I regard as relevant, relating to that which she receives from the Association of Teachers and Lecturers and from Unison. While I am on the subject, I think that the sponsorship of the Labour party leader by the Transport and General Workers Union is also relevant.

Mrs. Taylor: This is a typical abuse by certain hon. Members, who are trying to mislead people about the amendment. I say to the House, and to the hon. Gentleman in particular, that the procedure that the Opposition followed in tabling the amendment, in relation to the registration of interests, has been cleared in detail with the parliamentary commissioner, who was appointed to take notice of those issues. It is a matter for him. If the hon. Gentleman does not understand that, he ought to go away and read the reports so that he understands the system that we introduced about a week ago.

Several hon. Members: rose—

Mr. Deputy Speaker (Mr. Michael Morris): Order. Hon. Members should be clear that if they have a complaint in relation to registration, it should be raised with the parliamentary commissioner. Such a complaint is not for debate this evening. We will return to the Gracious Speech.

Mr. John Marshall: On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker: I have given my ruling. I hope that the hon. Gentleman is raising a point of order on a different matter.

Mr. Marshall: Mr. Deputy Speaker—

Mr. Deputy Speaker: Order. Is it a different matter? No. I call Mrs. Taylor.

Mr. Marshall: I wanted your advice, Mr. Deputy Speaker.

Mr. Deputy Speaker: Order.

Mrs. Taylor: Thank you, Mr. Deputy Speaker, for confirming the interpretation that I gave the House.
As I was trying to say before the hon. Gentleman so misleadingly interrupted—

Mr. Anthony Coombs: rose—

Mrs. Taylor: I shall not give way. I intend to make my speech, not to answer irrelevant interventions which you, Mr. Deputy Speaker, have already ruled out of order.

Mr. Day: On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker: Order. I hope it is a new point of order.

Mr. Day: I want to correct a point of order that I raised earlier. The House will recall that, earlier this evening, the hon. Member for Ellesmere Port and Neston (Mr. Miller) claimed that Cheshire county council was Conservative-controlled. I rose to put the record straight, on the basis of the seats allocated to each party. The information that I imparted to the House was correct: there are 22 Conservatives, 35 Labour councillors and 14 Liberal Democrats.
It has since been brought to my attention, however, that the chairman of the authority is indeed a Conservative. I understand that that is the result of some deal struck between the Liberal Democrats and the Conservatives. I thought it only right to put the record straight, and if I gave any offence to the hon. Gentleman, I apologise.

Mr. Deputy Speaker: I am most grateful.

Mr. Miller: Further to that point of order, Mr. Deputy Speaker. I am grateful for the hon. Gentleman's comments and I do not blame him for what he said, although it was not a strong point in favour of the Conservative party.

Mrs. Taylor: If we could now return to the debate, that would be of benefit to the House.
We have heard the hon. Member for Ryedale (Mr. Greenway), for example, whom we are glad to see back with us following his illness, speak about local government reorganisation. We have also heard speeches on housing and the family. I would hesitate before trying to follow the cultural contribution of my hon. Friend the Member for Renfrew, West and Inverclyde; suffice it to say that many of the problems that he related are known to the constituents of many other hon. Members. I think in particular of the many difficulties that my constituents have experienced with the Child Support Agency—my hon. Friend highlighted some of them.
I start by reminding the House of the comments made by the Lord President on Queen's Speech debates. He wrote recently that the Queen's Speech is always an important signpost to the political year. That is true. This year, the wording on the signpost is large and clear: "General election this way". What is more, as everyone now knows, the sign writer this year was the chairman of the Conservative party. For the first time, the briefing on the eve of the Queen's Speech was given not by the Leader of the House but by the chairman of the Conservative party, who cynically told journalists of his strategy—that the speech had been drawn up to put Labour on the spot and to challenge the Labour leader after his warm words to the CBI.
As we all know, few things happen in Parliament that are not either openly political or have heavy political overtones, but we have surely reached new depths of cynicism when the whole thrust of the Queen's Speech becomes an exercise in party political point scoring.
What Ministers should recognise—although after 17 years of assuming a divine right to rule I doubt they do—is that Parliament is not an annex of Tory central office, and that the law-making process of this House should not be a crude extension of the writing of a party manifesto.
This evening, one of the least confrontational Ministers, the Leader of the House, is to wind up our debate. We may at last, therefore, hear something constructive. The right hon. Gentleman acknowledged in an article in The House Magazine this week that certain Bills were included in the Queen's Speech by agreement between our two parties' Front-Bench spokesmen. He drew attention to the consultation that had taken place on the drafts of the Armed Forces Bill and the Reserve Forces Bill. He also mentioned the offer that I made at business questions last year to facilitate the speedy passage of the Bill ratifying the chemical weapons convention, so he will acknowledge that there are occasions when the House can work constructively when there is agreement in principle on a certain issue.
That brings me to the Asylum and Immigration Bill. The Leader of the House knows from my evidence to the Procedure Committee in June that I favour a greater use of Special Standing Committees. So, I believe, does he in some circumstances. We were told yesterday—we have been told it on other occasions—that the offer of a Special Standing Committee made by my right hon. Friend the Leader of the Opposition on the first day of this debate could not be accepted because the Bill was controversial and Special Standing Committees could not to be used for that purpose. I disagree with that analysis; I do not think that that was ever the presumption.
During the passage of what became the Water Act 1989, which privatised the water industry, it was suggested that a Special Standing Committee should be established, despite our opposition to the privatisation. The first part of the Bill created the National Rivers Authority, in which, on principle, there was agreement. The suggestion of a Special Standing Committee was not accepted, but I believe that the legislation would have been better if it had been.
Even if the Prime Minister is right to believe that Special Standing Committees are used only for non-controversial Bills, we must ask what makes the Asylum and Immigration Bill controversial. On Wednesday, the Prime Minister said that it would
ensure that we have a fair system of asylum—fair for those who need help, and fair for those who do not believe that this country should receive bogus asylum seekers either.
On the same occasion, the Leader of the Opposition said:
We oppose bogus applications and fraud and we recognise the need for immigration controls".—[Official Report, 15 November 1995; Vol. 267, c. 17–30.]
There was apparent agreement between them.
It must also be agreed by hon. Members on both sides of the House that the Asylum and Immigration Appeals Act 1993 was flawed, and that the Government got it wrong then; otherwise, there would be no need for new measures now. The question is, what is required? Do we need administrative change to deal with the backlog of applications, or do we need more fundamental changes in the system? If there is agreement on the objective, as the Prime Minister has said, why should we not try to achieve that objective in productive ways?
If, however, the purpose of the Asylum and Immigration Bill is to act as a vehicle for extreme statements about race relations—such as those made by Andrew Lansley, a prospective Conservative parliamentary candidate who has talked openly of the political benefits of playing the race card, saying that immigration has the potential to hurt the Labour party—the Bill will not achieve the Prime Minister's stated objective of improving race relations.
Moreover, the Prime Minister and others ought to bear in mind the existence of real practical problems with the proposed legislation. Ministers should know that, not least because the Secretary of State for Education and Employment has pointed it out. She has said that she agrees in principle with deterring illegal working, adding:
I do, however, have some concerns … Either way there could be racial discrimination … A balance needs to be found between the benefits achieved by such a scheme and the burden it would place on employers".
I suggest to the Leader of the House that, if the Secretary of State for Education and Employment has such fears, it is surely reasonable for others to have them as well.
Parliament has tried to get asylum rules and procedures right in the past, and has failed. Opposition Members proposed the establishment of a Special Standing Committee in 1992, and it was rejected. Perhaps, had the Government agreed to it, we would not now be discussing the need for new legislation. The House of Commons should be able to say that, if it is agreed that a problem exists, that problem should be susceptible of solution by the House.
Let me cite just one problem in regard to which the Government's inactivity makes us worry about their approach to such problems. That problem could have been tackled, but has not been. This example may expose some of the double-speak of the Tory party in the Queen's Speech.
In 1990, the Government promised to deal with a loophole in legislation that enabled organised criminals to perpetrate many kinds of fraud. I refer to what was called at the time the "Day of the Jackal" loophole, which exploited the ease of access to birth certificates in Britain.
In 1990, the Government produced a White Paper, "Registration—Proposals for Change", yet some of its recommendations have not yet been put into effect—most notably those intended to counter the loophole that allows the creation of false identities by organised criminal gangs, who can obtain birth certificates, and subsequently other documents, that can form the basis for fraud in a wide range of areas from social security to immigration.
This year, in a letter to my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker), the Prime Minister said that he had been unable to find parliamentary time to close the loophole, yet there had been no approach to the Opposition to ask for our co-operation with such a measure. Why not? Surely if Ministers genuinely wanted to make progress, instead of simply making loud complaints about the problem, there would have been an approach.
Hon. Members frequently complain about the public image and standing of Parliament. They often blame television and complain that Prime Minister's Question Time is the only representation of the House, yet when constructive suggestions are made, the Government turn their back on them, as they are doing now in connection with the Asylum and Immigration Bill. That refusal does the House no good whatever.
I do not believe that the Leader of the House was allowed to influence that decision, which is a shame because he is a wiser man than the Home Secretary, and had he had his way the House could have been shown in a better light.
I shall now talk about some of the areas for which the Leader of the House is specifically responsible. Incidentally, I thank him for announcing today the dates of the 10 constituency Fridays for this Session, and I also thank him in advance for his anticipated early announcement of recess dates.
When I consider the parliamentary time that we have available, and when I hear comments such as those of the right hon. Member for Worthing (Sir T. Higgins), I am reminded how many failings our present system has. The Queen's Speech and the Budget—two of the biggest parliamentary occasions—are within days of each other. It is right that the debates on them are long and take a great deal of parliamentary time—but we may be short of time later.
What the House needs is not the tinkering changes to procedure to which the Jopling report led, but a far more fundamental rethink of how our parliamentary system could be made to work more effectively through measures such as the publication of draft Bills, the use of pre-legislative Committees and the reorganisation of our timetable so as to make better use of the time available and to avoid the long three-month gap, which makes no sense in terms of the accountability of the House to the public.
I believe that, unless we start thinking about those issues, and unless we make such changes, not necessarily to give more sitting days but to spread them more carefully throughout the year, Parliament will not be able to do its job effectively. I am sorry that this year the Leader of the House has not been able to lead a campaign for further changes in our procedures. I understand that change is always difficult, and that the House is always very traditional, but I hope that more change can come.
The House has been traditional today because, as has been our habit in recent years, we began the last day of the debate on the Queen's Speech with a debate on economic policy. At times today we might have been forgiven for thinking that we were in the middle of a Budget debate already—although clearly, judging by the questions that my hon. Friend the Member for Dunfermline, East (Mr. Brown) was asked, it would have been a Budget introduced by a Labour Chancellor. It was my hon. Friend who was asked to provide all the answers. [HON. MEMBERS: "He did not provide any."] He provided many of the answers—unlike the Chancellor, who does not seem to know the difference between objectives and policies.
I always find it amusing that Conservative Members expect my hon. Friend to answer details about what will be in his first Budget in 18 months' time. Conservative Members tell us that the election might not be for 18 months, but I am not sure that the Chancellor will be able to tell us what he is going to do next week.

Mr. Jacques Arnold: Will the hon. Lady give way?

Mrs. Taylor: I am normally willing—

Mr. Arnold: rose—

Mrs. Taylor: Will the hon. Gentleman let me finish? I am normally willing to give way but, unfortunately, Conservative Members wasted time at the beginning of my speech so I shall not give way.
I have worked out why my hon. Friend the shadow Chancellor is always asked for so many details. Quite simply, there is so much interest in my hon. Friend's first Budget because there is so little confidence in this Queen's Speech. There is little confidence that the Queen's Speech has any relevance whatsoever to the needs of the country.
The Chancellor, by contrast, has the luxury of sealed lips, and he cannot disclose the details of next week's Budget. I suppose that we will just have to wait until Sunday to read the briefings that the chairman of the Conservative party will give out. Nothing the Chancellor said today gives us confidence that he is anything other than incredibly complacent about the economic prospects for the country.
Throughout the week of debate on the Queen's Speech, many themes have emerged. The main one is that the Queen's Speech does not attack the fundamental problems that face the country. My right hon. Friend the Leader of the Opposition asked last Wednesday where the plan for job creation was, and how the Government proposed to counter insecurity. Do Ministers realise that, in the five years to the end of 1994, almost 11 million British people—or two in five of the work force—experienced unemployment? That insecurity is real.
Do Ministers realise that the amount of money that individuals have to spend has fallen, as a Financial Times article last week showed? That is not a state of mind, as the Secretary of State for Trade and Industry would imply. Do Ministers realise that 70 per cent. of all home repossessions are caused by job losses? That is not a state of mind, and those who suggest that it is insult the thousands of families who have been desperately hit by Conservative policies during the past few years.
One issue that was not mentioned in the Queen's Speech, but which I wish to touch on briefly—not least because I have a constituency interest—is the inadequacy of regulation of the private utilities. There was a debate in the House this morning on the problems facing my constituents and others in West Yorkshire. The House heard during that debate that Yorkshire Water supplied tankers of water free of charge to soften training grounds for racehorses while it was threatening rota cuts in the rest of West Yorkshire.
Yorkshire Water told firms in Bradford that they should either relocate or boil 500, 000 gallons of water a day during the crisis. It has shown sheer incompetence. That is the impression not just of Labour Members of Parliament, but of local industry. The company's incompetence shows that regulation of the private utilities is woefully inadequate, but all the Minister could say today was that if the situation did not improve, he might have to consider setting leakage targets. There are 600 tankers trundling through Yorkshire, but one in three is wasting its time, because, as soon as the water gets into the system, it starts leaking out. All the Minister could say was that if the situation did not get any better he might have to consider what to do. The Minister wanted to wash his hands of that situation—[Laughter] That would be more than the chairman of Yorkshire Water did—he claimed that he did not do such healthy things.
Many other problems are created by the Queen's Speech. I am sorry that the hon. Member for Leeds, North-West (Dr. Hampson) is not here. He talked about nursery education in Leeds and said that he welcomed the nursery voucher scheme because he thought that it would bring some nursery places. He said that the situation in relation to nursery places in Leeds was appalling. I have checked the figures since the hon. Gentleman spoke, which may be why he is not here.
In Leeds, 45 per cent. of all three and four-year-olds and 30 per cent. of rising-fives are in nursery schools, so 75 per cent. of nursery age children in Leeds are in nursery education. The dreadful, appalling con trick of nursery vouchers is that they threaten that Labour-controlled council's excellent provision of nursery places, from which many children have benefited over many years. The Government's cynical contract will not be accepted by parents, because parents do not want nursery vouchers: they want quality nursery education for their children, which the Government are failing to provide.
Throughout the Queen's Speech, Ministers and Conservative Members have clearly been practising for their time in opposition. They behave like an Opposition. They absolve themselves of all the problems that the country is facing. How often have we heard from Conservative Members during the past few days that something should be done about Government borrowing, interest rates, the quality of education and the level of crime? Those remarks were made by hon. Members who belong to a party that has been in office for 16 years.

Sir Terence Higgins: Will the hon. Lady give way?

Mrs. Taylor: I do not have time.
The Chancellor had no evidence whatever to give today when he was under fire from my hon. Friend the shadow Chancellor. The sad fact is that Britain has fallen from

13th to 18th place in the GDP league table. I have looked—perhaps the hon. Member for Lancaster (Dame E. Kellett-Bowman) would like to look as well—at what the Conservative research department brief says about the league table that shows that Britain has fallen from 13th to 18th place. It says:
Labour's table is misleading and inaccurate … Labour's league table is another example of their cynicism: they don't care how spurious their figures are.
The brief fails to mention that the source of the table is a document produced by the Government entitled "Competitiveness: Forging Ahead". The Chancellor chose to quote The Wall Street Journal as his only source of support. Perhaps he should come closer to home and look at last Thursday's Financial Times, which says:
The pound sank to a record low on the foreign exchanges yesterday as figures showing a rise in unemployment and the biggest fall in living standards for nearly 14 years".
The Chancellor said nothing to deal with that. He showed only utter complacency.
The Queen's Speech shows total complacency and gives no hope for Britain. It is a discredited Queen's Speech from a discredited Government who have failed Britain. The sooner they go, the better.

The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): I shall follow the pattern of the speech of the hon. Member for Dewsbury (Mrs. Taylor) by starting in a quieter tone. I recall that, on the first occasion that I had this task of winding up the debate on the Address in 1992, a senior former colleague, whose name I will not reveal, but some may guess, who was aware of the fact that the Leader of the House conventionally says something about House of Commons matters, advised me with words to the effect of, "Forget all that Leader of the House stuff and just sock it to 'em." Being of a naturally conservative nature, however, I stuck to the convention on that occasion, as I propose to do for part of my speech tonight.
Indeed, at a time when the House is so often much criticised for the way in which its business is conducted, it is worth spending a few minutes on the significant improvements of the past year.

Mr. John Marshall: I thank my right hon. Friend for giving way to allow me to mention a House of Commons matter. He may be aware that, last week, I wrote to Sir Gordon Downey after the publication of an amendment to the Loyal Address in which a number of the signatories, who had been sponsored by a trade union, did not declare that sponsorship. His advice on declaring the interest on the Order Paper was that
this is the appropriate course of action to take.
Would my right hon. Friend care to comment on the fact that a right hon. Gentleman—a member of the Transport and General Workers Union—sought not to do so when he put his name to an amendment today?

Mr. Newton: I note what my hon. Friend says. I also heard the exchanges between the hon. Member for Dewsbury and another of my hon. Friends about a quarter of an hour ago. While I note what my hon. Friend says, the proper thing for me to do is to say that, if there is thought to be a source of complaint, it would be proper


for it to be directed to the Parliamentary Commissioner for Standards, whom we have put in place precisely to consider such complaints.

Mr. Archy Kirkwood: As we are on House of Commons matters, may I report to the Leader of the House that there is genuine confusion about the interpretation of the new rule? Does he not think, therefore, that it would be a good thing to expedite the setting up of the new Select Committee, to give the new commissioner clearer guidelines and instructions?

Mr. Newton: As the hon. Gentleman will know, I circulated a note setting out the position as clearly as was possible in the light of the report, the debate and the resolutions that the House had passed. I consistently acknowledged in the debate, as the report acknowledged, that there would be a need for further guidance and guidelines and that that would be the task of the Select Committee, working with the commissioner. I can assure the hon. Gentleman that the usual channels are beavering away with a view to getting the new Select Committee established and I hope that it will be possible to proceed before too much longer, partly for the very reason that he reasonably mentioned.
Before I return to one or two House of Commons matters that I wanted to mention, I must say that I was particularly sorry not to have been in the Chamber to hear the right hon. Member for Lagan Valley (Mr. Molyneaux), but with the miracles of modern technology, I was able to follow some of what he said from afar. I want to assure him that the Government warmly welcome the programme for peace and reconciliation in Northern Ireland and the border counties of Ireland. It is a tangible contribution to the peace process, and the right hon. Gentleman might like to know that all expenditure incurred under that programme will be subject to the same standards of accountability and the need to secure value for money as apply generally to public expenditure in the United Kingdom. I hope that that will be helpful to the right hon. Gentleman.
To return to the House of Commons part of my speech, looking back on the speech that I made on this occasion a year ago, I noticed some reasonably optimistically worded paragraphs in which I hoped—and I was proved right—that the hon. Member for Dewsbury would be similarly supportive. I had an optimistically worded passage about my hopes that we would find an agreed way forward on changes along the lines recommended by what has become known as Jopling.
The hon. Member for Dewsbury may see some irony in this, but against the background of our efforts at that time to suggest and subsequently to bring to the attention of our colleagues—that is perhaps the most tactful phrase that I can use—the desirability of 20-minute winding-up speeches in debates such as this, it is curious that we should find ourselves with more time than that on this occasion, for reasons that I do not wish to go into, but which we both understand.
Since that debate a year ago, we have not only achieved that agreement but conducted an experiment that I think is widely seen on both sides of the House as having been a very considerable success. It has brought about a reduction of the House's average sitting hours of something like an hour a day. It has made sittings beyond

11 pm a rarity and sittings beyond midnight a wholly exceptional event. Combined with longer notice of business, earlier notification of recesses and the introduction of non-sitting Fridays, it has genuinely helped hon. Members to plan in a more sensible way for their constituency and family commitments.
The arrangements for Wednesday mornings have increased the time and opportunities available for Back Benchers to raise subjects of their choice. The Government have been able to get their necessary business through, but without the Opposition feeling that they have been deprived of the proper opportunity, which I, of course, respect, to probe, discuss and, where they wish, oppose.
I do not think that this has been remarked on before, but I asked for some checking to be done today. One result of the changes has been that we have just experienced the first Session for 35 years in which no guillotine motion has been moved, with the solitary exception, I should perhaps say—I do not know whether this will wipe the smile off the face of the hon. Member for Glasgow, Garscadden (Mr. Dewar), but it probably will not—of 1978–79, when the absence of guillotines was the result of the Government being guillotined and a general election taking place.
The changes that have enabled all that to happen have been turned into permanent changes in our Standing Orders, which should enable us, with what I hope will be continued good will in the usual channels—I was encouraged by what the hon. Member for Dewsbury said—to consolidate those sensible developments. Certainly that will be my aim. I take this opportunity to thank warmly the hon. Member for Dewsbury for her kind words about me. Whether they will still apply by the time I have got to the end of my speech I am less sure. Whether they would have been approved by the hon. Member for Thurrock (Mr. Mackinlay) I rather doubt, because last week at business questions he effectively suggested that I should resign for being too reasonable.
Meanwhile, other gains have been made by procedural changes. The introduction of new arrangements both here and in another place have markedly increased our ability to deal with non-controversial Bills arising from Law Commission reports, with the twin advantages of improving the statute book and reducing the frustration of the Law Commission at seeing so much of its excellent work apparently disappear into limbo. In the past two Sessions, 13 Law Commission reports have been implemented, which is a substantial increase on earlier periods. I should make it clear, as does the Gracious Speech, that my noble Friend the Lord Chancellor will bring forward further such measures in the Session now getting under way.
Another significant improvement is the changes brought forward by my right hon. Friend the President of the Board of Trade, then the Secretary of State for Scotland, which have enhanced the role of the Scottish Grand Committee. In the past year, the Committee has met in Glasgow and Aberdeen as well as in Edinburgh and Westminster. There have been extra sessions of Scottish questions in the Committee, as well as statements by Ministers and debates initiated both by Government and by the various Opposition parties. As the House knows, the Government are considering how those new


procedures can be developed further, and my right hon. Friend the Secretary of State for Scotland will be making an announcement in due course.
Then, too, and certainly no less important, there is the matter to which my hon. Friend the Member for Hendon, South (Mr. Marshall) and the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) referred. I refer to the changes that the House agreed just before the end of the previous Session, following the work of the Nolan report and the Select Committee on Standards in Public Life. Although inevitably obscured, perhaps rather unfortunately, by the controversy on one point, people are less well aware than those of us who were concerned with the work of that Committee would like them to be of the fact that it was largely on the basis of consensus, in an all-party Committee, and with the support of large and sometimes overwhelming majorities in the House, that we put in place the most significant strengthening of our rules in many decades.
I hope that I make the following claim rightly on behalf of the House as a whole. In short, over the past year, the House has done a great deal to adapt to new needs, new circumstances, new conditions and new moods, showing exactly the strength that has made it probably the most enduring institution of its kind in the world. Although I note, as I have had to note on one or two radio programmes, the pressure for faster or more radical change, I believe that the evolutionary development of this place is a fundamental part of its strength and the reason why it has lasted so well and so long.

Mr. Benn: In the light of the experience of the Privileges Committee, to which the Leader of the House refers, has he given any further thought to the advantages to Parliament's reputation of such Committees being open so that the debates can be heard, a point that I made a year ago and for which I paid a heavy price? I believe that the time has come when the openness of such Select Committees should be seriously considered.

Mr. Newton: Obviously enough, I and, no doubt, many others have given further thought to that point. I draw a distinction between the question whether evidence should be taken in public under certain circumstances and the question whether deliberation should take place in public. I think that, far from being enhanced, the role of the Committees would be destroyed were meetings to be wholly held in public.
Certainly the hon. Member for Dewsbury will agree that we teased out, eventually successfully, the vast majority of the subject matter, such as the appointment of the parliamentary commissioner, the code, the new Select Committee on Standards and Privileges, the ban on advocacy and a whole range of what was agreed by the House a fortnight ago. Had we sought to achieve that unanimity on the basis of having everything openly reported and available—every exchange and every modification—it would not have worked. We would have ended up with a totally different and far less satisfactory way in which to proceed.
I make this point even without being able to prove it by revealing the proceedings beyond what I have said just now. Anybody who had been able to listen to the exchanges, assuming that they could have been entirely

confidential and that the presence of a listener would not have inhibited them, which of course it would have done, would have thought that it was an example of all the parties in Parliament at their best, working in the interests of Parliament as a whole. The results demonstrate that.

Mr. Tony Marlow: My right hon. Friend talks about unanimity in the Committee. Sometimes when that happens, the House should be put on its guard. In the event, we had a three-hour debate and most of the people who spoke in that debate were either members of the Committee or related to the subject. Back Benchers or others who might have had a different point of view had no time to bring their points of view forward. When next a Select Committee has debates and produces recommendations, will my right hon. Friend give the House an undertaking that there will be proper time for people who have not been members of that Committee to put their points of view in a debate?

Mr. Newton: I always give consideration to such representations. I do not think that I can make an advance commitment without knowing what my hon. Friend might be talking about. Is he, for example, talking about a report that might come from the new Select Committee on Standards and Privileges? I assure him that I shall bear in mind what he has said, because I know that he reflects the views of other hon. Members as well.
I now touch on one other point which is more clearly for the Government as such, but which is very much directed towards improving the working of Parliament in relation to legislation. I know that the hon. Member for Birmingham, Perry Barr (Mr. Rooker) is interested in this point. I refer to the publication of Bills in draft so that those who may be affected by them have a good opportunity to comment not only on the policy, but on the detail and practical effect of proposed legislation. That proved helpful in the Session before last, in the case, albeit a rather special one, of the Sunday Trading Bill, and with the Environment Agency provisions of the Environment Act 1995. In the previous Session—the hon. Member for Dewsbury kindly referred to this—we published draft Bills on the reserve forces, on defamation and on arbitration, all of which we hope to bring before the House this Session.
More recently we published drafts of the Hong Kong (Overseas Public Servants) Bill and the Chemical Weapons Bill, which the House will consider tomorrow. Inevitably, it will not be possible for every Bill to be published in draft, but I have no doubt that, where timing and other considerations make it practicable and appropriate, that practice can greatly contribute to the quality of the legislation that the House passes.
As the Government said in the second competitiveness White Paper, which has been waved about in a different context several times today:
Publication of draft Bills, in advance of introduction in Parliament, allows consultation to take place on clarity of structure and presentation, and on drafting detail, as well as on policy.
The White Paper made it clear that we hope to move further in that direction and to increase the number of Bills published in draft in advance. I can tell the House, and I think that it has not been said before, that, in the current Session, and in the spirit of the White Paper, we intend to publish draft Bills on adoption, building societies and merchant shipping.

Mr. Peter Shore: The right hon. Gentleman has made a strong case for publishing draft Bills, to enable people to consider them and to contribute before they become final. Given the obvious controversy surrounding the Asylum and Immigration Bill, does he not think that it would be a suitable candidate for publishing in draft before the final Bill is presented?

Mr. Newton: Perhaps rather delphically, I used a phrase about "where timing and other considerations make it practicable and appropriate". The figures that my right hon. and learned Friend the Home Secretary gave in his statement the other day, and no doubt used in his speech on Monday, make it clear that the rapid and almost dramatic escalation in the problem suggests that it is one that must be tackled more urgently than would be allowed for by the suggestion made by the right hon. Member for Bethnal Green and Stepney (Mr. Shore).

Sir David Mitchell: Does my right hon. Friend see scope for applying the principle to Euro-regulations and directives?

Mr. Newton: As for legislation initiated in Europe, that question would not fall to me as Leader of the House in this Parliament. I have been concerned notably with social security legislation, and moves have already been made to publish secondary legislation in draft, for example, for consultation with the Social Security Advisory Committee. Where practicable, and where it would genuinely help to improve the legislative process, I would like consideration to be given to such publication in draft, in appropriate cases.

Dame Elaine Kellett-Bowman: Does my right hon. Friend agree that it is one thing to refer Law Commission reports to a Special Standing Committee, as he mentioned earlier, but quite another to do as the hon. Member for Dewsbury (Mrs. Taylor) said, and refer such a controversial Bill as the Asylum and Immigration Bill to such a Committee?

Mr. Newton: The hon. Member for Dewsbury referred to that suggestion, which has been the subject of much argument in the House in the past few days and correspondence between my right hon. Friend the Prime Minister and the Leader of the Opposition. I basically agree with my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman), but I do not want to add to the argument tonight, despite the blandishments of the hon. Member for Dewsbury.
The hon. Member for Dewsbury unhelpfully anticipated another point that I wanted to raise, which takes me back to the spirit of Jopling—in this case, the earlier notification of recess dates. The House may like to know that, subject to the progress of business, the House will rise at the conclusion of business on Wednesday 20 December until Tuesday 9 January. At Easter, again subject to the progress of business, the House will rise at the conclusion of business on Wednesday 3 April until Tuesday 16 April. That of course means that the recess this year will cover the week after Easter rather than the week before, as it did last Session. I hope that that is helpful to the House and that I may claim my brownie points. However, whatever else is obvious today, it is obvious that there is a good deal of debate to come on many issues before we get as far as the Christmas recess, let alone Easter, and it is to some of those arguments that I shall now refer.
I start by referring to the speech of the hon. Member for Dunfermline, East (Mr. Brown)—or rather, the annual re-run of the same speech, to which I always listen with interest, if only in hope, which has so far always proved vain, of hearing something new. That familiar but not especially friendly speech has two characteristics. First, it relentlessly runs the country down and ignores every achievement. The second characteristic is that, having said that everything is wrong, the hon. Gentleman says nothing whatever about what he would do about it. In both respects, he played true to form today.
We heard much about unemployment, which we all want to reduce and which we have reduced by 700, 000, but not a word about the extent to which the country has effectively the best record in Europe in reducing unemployment and in putting the biggest proportion of its population into work.
We heard many references to people who are less well-off and vulnerable, but not a word about the tens of thousands of people being helped by disability living allowance, introduced by the present Government, the more than £1 billion extra in real terms put into helping low-income families since 1988 and another £1 billion put into helping the less well-off pensioners.
We heard much about the need for investment—which the Chancellor countered with some striking figures showing how much better our record was than many others—but not a word about the country's record in attracting inward investment, obtaining one third of all investment into the European Union from outside, which embraced 41 per cent. of that from Japan, 43 per cent. of that from the United States and 50 per cent. of that from Korea.
To cap it all, we heard—from a Labour Front-Bench spokesman—about the lurch to the right. The most that can be said about that is that at least it is something of which Labour Front-Bench Members have some first-hand experience—but for how long? I do not know, because we can see the faces on the Labour Benches below the Gangway when hon. Members speak from the Labour Front Bench. We can also see the faces on the Labour Back Benches when hon. Members speak from the Labour Front Bench.
I make no apology for repeating what my right hon. and learned Friend the Chancellor of the Exchequer said this afternoon, when he quoted the striking words of the hon. Member for Hackney, North and Stoke Newington (Ms Abbott):
Gordon can say anything he likes if he thinks it is going to win the Election. But ordinary Labour party supporters in this country, particularly the poor and the unemployed when Labour is in power will be looking for other priorities from tax cuts.
[Interruption.] What, "Hear, hear" from below the Gangway? Does the hon. Member for Worsley (Mr. Lewis) want to intervene?

Mr. Terry Lewis: indicated dissent.

Mr. Newton: That is only because the hon. Gentleman does not want to confirm what I am saying.
On the Opposition Benches, there is not a lurch to the left but a leap to the left, and an awful lot of people are left behind.
After his litany of gloom, what did we get from the hon. Member for Dunfermline, East? Frankly, we got even less than usual. However, the hon. Member for Dewsbury said that he was being asked for all the answers. I should not mind if we received any answers, let alone all of them.
In his speech last week, the Leader of the Opposition started off by describing the Queen's Speech, on which we are now debating the humble Address, as irrelevant to the needs of Britain and a pathetic mouse. Three paragraphs further on, he had—as the hon. Member for Dewsbury has tonight—expressed support for about half the programme or had said that he thought that Labour had thought of it. He continued to wriggle, to try to dissociate himself from his hon. Friends' opposition to the asylum Bill. It came down to the fact that he did not like the speech because it enhanced opportunity, choice and standards in education.
The Queen's Speech is not an irrelevant mouse; it is a vigorous programme in the interests of our country. I invite the House to support it tonight.

Question put, That the amendment be made:—

The House divided: Ayes 271, Noes 298.

Division No. 2]
[10.00 pm


AYES


Abbott, Ms Diane
Chidgey, David


Adams, Mrs Irene
Chisholm, Malcolm


Ainger, Nick
Church, Judith


Ainsworth, Robert (Cov'try NE)
Clapham, Michael


Allen, Graham
Clark, Dr David (South Shields)


Alton, David
Clarke, Eric (Midlothian)


Anderson, Donald (Swansea E)
Clarke, Tom (Monklands W)


Anderson, Ms Janet (Ros'dale)
Clelland, David


Armstrong, Hilary
Clwyd, Mrs Ann


Ashdown, Rt Hon Paddy
Cohen, Harry


Ashton, Joe
Connarty, Michael


Austin-Walker, John
Cook, Robin (Livingston)


Barnes, Harry
Corbett, Robin


Barron, Kevin
Corbyn, Jeremy


Battle, John
Corston, Jean


Bayley, Hugh
Cousins, Jim


Beckett, Rt Hon Margaret
Cummings, John


Beith, Rt Hon A J
Cunningham, Jim (Covy SE)


Bell, Stuart
Cunningham, Rt Hon Dr John


Benn, Rt Hon Tony
Cunningham, Roseanna


Bennett, Andrew F
Dalyell, Tam


Benton, Joe
Darling, Alistair


Bermingham, Gerald
Davies, Bryan (Oldham C'tral)


Berry, Roger
Davies, Chris (L'Boro & S'worth)


Betts, Clive
Davies, Rt Hon Denzil (Llanelli)


Blunkett, David
Davies, Ron (Caerphilly)


Boateng, Paul
Davis, Terry (B'ham, H'dge H'l)


Bradley, Keith
Denham, John


Bray, Dr Jeremy
Dewar, Donald


Brown, Gordon (Dunfermline E)
Dixon, Don


Brown, N (N'c'tle upon Tyne E)
Dobson, Frank


Bruce, Malcolm (Gordon)
Donohoe, Brian H


Burden, Richard
Dowd, Jim


Byers, Stephen
Dunwoody, Mrs Gwyneth


Caborn, Richard
Eagle, Ms Angela


Callaghan, Jim
Eastham, Ken


Campbell, Mrs Anne (C'bridge)
Etherington, Bill


Campbell, Menzies (Fife NE)
Evans, John (St Helens N)


Campbell, Ronnie (Blyth V)
Ewing, Mrs Margaret


Campbell-Savours, D N
Fatchett, Derek


Canavan, Dennis
Field, Frank (Birkenhead)


Cann, Jamie
Fisher, Mark


Candle, Alexander (Montgomery)
Flynn, Paul





Foster, Rt Hon Derek
McCrea, The Reverend William


Foster, Don (Bath)
Macdonald, Calum


Foulkes, George
McFall, John


Fyfe, Maria
McKelvey, William


Galbraith, Sam
Mackinlay, Andrew


Galloway, George
McLeish, Henry


Gapes, Mike
McMaster, Gordon


Garrett, John
McNamara, Kevin


Gerrard, Neil
MacShane, Denis


Gilbert, Rt Hon Dr John
Madden, Max


Godman, Dr Norman A
Maddock, Diana


Godsiff, Roger
Mahon, Alice


Golding, Mrs Llin
Mandelson, Peter


Gordon, Mildred
Marek, Dr John


Graham, Thomas
Marshall, Jim (Leicester, S)


Grant, Bernie. (Tottenham)
Martin, Michael J (Springburn)


Griffiths, Nigel (Edinburgh S)
Martlew, Eric


Griffiths, Win (Bridgend)
Maxton, John


Grocott, Bruce
Meacher, Michael


Gunnell, John
Meal, Alan


Hain, Peter
Miche, Alun


Hall, Mike
Michie, Bill (Sheffield Heeley)


Hanson, David
Michie, Mrs Ray (Argyll & Bute)


Hardy, Peter
Milburn, Alan


Harman, Ms Harriet
Miller, Andrew


Harvey, Nick
Morgan, Rhodri


Hattersley, Rt Hon Roy
Morgan, Elliot


Henderson, Doug
Morris, Rt Hon Alfred (Wy'nshawe)


Heppell, John
Morris, Estelle (B'ham Yardley)


Hill, Keith (Streatham)
Morris, Rt Hon John (Aberavon)


Hinchliffe, David
Mowlam, Marjorie


Hoey, Kate
Mudie, George


Hogg, Norman (Cumbernauld)
Mullin, Chris


Hood, Jimmy
Murphy, Paul


Hoon, Geoffrey
O'Brien, Mike (N W'kshire)


Howarth, Alan (Strat'rd-on-A)
O'Brien, William (Normanton)


Howarth, George (Knowsley North)
O'Hara, Edward


Howells, Dr Kim (Pontypridd)
Olner, Bill


Hoyle, Doug
O'Neill, Martin


Hughes, Kevin (Doncaster N)
Orme, RT Hon Stanley


Hughes, Robert (Aberdeen N)
Parry, Robert


Hughes, Roy (Newport E)
Perarson, Ian


Hughes, Simon (Southwark)
Pendry, Tom


Hutton, John
Pickthall, Colin


Illsley, Eric
Pike, peter L


Ingram, Adam
Pope, Greg


Jackson, Glenda (H'stead)
Powell, Ray (Ogmore)


Jackson, Helen (Shef'ld, H)
Prentice, Bridget (Lew'm E)


Jamieson, David
Prentice, Gordon (Pendle)


Janner, Greville
Prescott, Rt Hon John


Johnston, Sir Russell
Primarolo, Dawn


Jones, Barry (Alyn and D'side)
Purchase, ken


Jones, Ieuan Wyn (Ynys MÔn)
Quin, Ms Joyce


Jones, Jon Owen (Cardiff C)
Radice, Giles


Jones, Lynne (B'ham S O)
Rendall, Stuart


Jones, Martyn (Clwyd, SW)
Reynsford, Nick


Jones, Nigel (Cheltenham)
Reid, Dr John


Jowell, Tessa
Rendel, David


Kaufman, Rt Hon Gerald
Robertson, George (Hamilton)


Keen, Alan
Robinson, Geoffrey (Co'try NW)


Kennedy, Charles (Ross, C&S)
Roche, Mrs Barbara


Kennedy, Jane (L'pool Br'dg'n)
Rogers, Allan


Khabra, Piara S
Rooker, Jeff


Kilfoyle, Peter
Rooney, Terry


Kirkwood, Archy
Ross, Ernie (Dundee W)


Lestor, Joan (Eccles)
Rowlands, Ted


Lewis, Terry
Ruddock, Alex


Liddell, Mrs Helen
Salmond, Alex


Livingstone, Ken
Sedgemore, Brian


Lloyd, Tony (Stretford)
Sheerman, Barry


Llwyd, Elfyn
Sheldon, Rt Hon Robert


Loyden, Eddie
Shore, Rt Hon Peter


Lynne, Ms Liz
Short, Clare


McAllion, John
Simpson, Alan


McCartney, Ian
Skinner, Dennis


McCartney, Robert
Smith, Chris (Isl'ton S & F'sbury)






Smith, Llew (Blaenau Gwent)
Walker, Rt Hon Sir Harold


Spearing, Nigel
Walley, Joan


Spellar, John
Wardell, Gareth (Gower)


Squire, Rachel (Dunfermline W)
Wareing, Robert N


Steinberg, Gerry
Welsh, Andrew


Stevenson, George
Wicks, Malcolm


Stott, Roger
Williams, Rt Hon Alan (Sw'n W)


Strang, Dr. Gavin
Williams, Alan W (Carmarthen)


Straw, Jack
Wilson, Brian


Sutcliffe, Gerry
Winnick, David



Wise, Audrey


Taylor, Mrs Ann (Dewsbury)
Worthington, Tony


Taylor, Matthew (Truro)
Wray, Jimmy


Thompson, Jack (Wansbeck)
Wright, Dr Tony


Timms, Stephen
Young, David (Bolton SE)


Tipping, Paddy



Touhig, Don
Tellers for the Ayes:


Tyler, Paul
Ms Ann Coffey and


Vaz, Keith
Mr. Dennis Turner.




NOES


Ainsworth, Peter (East Surrey)
Congdon, David


Aitken, Rt Hon Jonathan
Coombs, Anthony (Wyre For'st)


Alexander, Richard
Coombs, Simon (Swindon)


Alison, Rt Hon Michael (Selby)
Cope, Rt Hon Sir John


Allason, Rupert (Torbay)
Cormack, Sir Patrick


Amess, David
Couchman, James


Arbuthnot, James
Cran, James


Arnold, Jacques (Gravesham)
Currie, Mrs Edwina (S D'by'ire)


Arnold, Sir Thomas (Hazel Grv)
Curry, David (Skipton & Ripon)


Ashby, David
Davies, Quentin (Stamford)


Atkins, Rt Hon Robert
Davis, David (Boothferry)


Atkinson, David (Bour'mouth E)
Day, Stephen


Atkinson, Peter (Hexham)
Deva, Nirj Joseph


Baker, Rt Hon Kenneth (Mole V)
Devlin, Tim


Baker, Nicholas (North Dorset)
Dorrell, Rt Hon Stephen


Baldry, Tony
Douglas-Hamilton, Lord James


Banks, Matthew (Southport)
Dover, Den


Banks, Robert (Harrogate)
Duncan, Alan


Batiste, Spencer
Duncan-Smith, Iain


Bellingham, Henry
Dunn, Bob


Bendall, Vivian
Durant, Sir Anthony


Beresford, Sir Paul
Dykes, Hugh


Biffen, Rt Hon John
Eggar, Rt Hon Tim


Bonsor, Sir Nicholas
Elletson, Harold


Booth, Hartley
Emery, Rt Hon Sir Peter


Boswell, Tim
Evans, David (Welwyn Hatfield)


Bottomley, Peter (Eltham)
Evans, Jonathan (Brecon)


Bottomley, Rt Hon Virginia
Evans, Nigel (Ribble Valley)


Bowis, John
Evans, Roger (Monmouth)


Boyson, Rt Hon Sir Rhodes
Evennett, David


Brandreth, Gyles
Faber, David


Brazier, Julian
Fabricant, Michael


Bright, Sir Graham
Fenner, Dame Peggy


Brooke, Rt Hon Peter
Field, Barry (Isle of Wight)


Brown, M (Brigg & Cl'thorpes)
Fishburn, Dudley


Browning, Mrs Angela
Forman, Nigel


Bruce, Ian (Dorset)
Forsyth, Rt Hon Michael (Stirling)


Budgen, Nicholas
Forth, Eric


Burns, Simon
Fowler, Rt Hon Sir Norman


Burt, Alistair
Fox, Dr Liam (Woodspring)


Butcher, John
Fox, Sir Marcus (Shipley)


Butler, Peter
Freeman, Rt Hon Roger


Butterfill, John
French, Douglas


Carlisle, John (Luton North)
Fry, Sir Peter


Carlisle, Sir Kenneth (Lincoln)
Gale, Roger


Carrington, Matthew
Gallie, Phil


Carttiss, Michael
Garel-Jones, Rt Hon Tristan


Cash, William
Garnier, Edward


Channon, Rt Hon Paul
Gill, Christopher


Chapman, Sir Sydney
Gillan, Cheryl


Churchill, Mr
Goodlad, Rt Hon Alastair


Clark, Dr Michael (Rochford)
Goodson-Wickes, Dr Charles


Clarke, Rt Hon Kenneth (Ru'clif)
Gorman, Mrs Teresa


Clifton-Brown, Geoffrey
Gorst, Sir John


Coe, Sebastian
Grant, Sir A (SW Cambs)





Greenway, Harry (Ealing N)
Mawhinney, Rt Hon Dr Brian


Greenway, John (Ryedale)
Mellor, Rt Hon David


Griffiths, Peter (Portsmouth, N)
Merchant, Piers


Grylls, Sir Michael
Mills, Iain


Gummer, Rt Hon John Selwyn
Mitchell, Andrew (Gedling)


Hague, Rt Hon William
Mitchell, Sir David (NW Hants)


Hamilton, Sir Archibald
Moate, Sir Roger


Hamilton, Neil (Tatton)
Molyneaux, Rt Hon James


Hampson, Dr Keith
Monro, Rt Hon Sir Hector


Hanley, Rt Hon Jeremy
Montgomery, Sir Fergus


Hannam, Sir John
Needham, Rt Hon Richard


Hargreaves, Andrew
Neubert, Sir Michael


Harris, David
Newton, Rt Hon Tony


Haselhurst, Sir Alan
Nicholls, Patrick


Hawkins, Nick
Nicholson, David (Taunton)


Hawksley, Warren
Nicholson, Emma (Devon West)


Hayes, Jerry
Norris, Steve


Heald, Oliver
Onslow, Rt Hon Sir Cranley


Heath, Rt Hon Sir Edward
Oppenheim, Phillip


Heathcoat-Amory, David
Ottaway, Richard


Hendry, Charles
Page, Richard


Hicks, Robert
Paice, James


Higgins, Rt Hon Sir Terence
Patnick, Sir Irvine


Hill, James (Southampton Test)
Patten, Rt Hon John


Hogg, Rt Hon Douglas (G'tham)
Pattie, Rt Hon Sir Geoffrey


Horam, John
Pawsey, James


Hordern, Rt Hon Sir Peter
Peacock, Mrs Elizabeth


Howell, Rt Hon David (G'dford)
Pickles, Eric


Howell, Sir Ralph (N Norfolk)
Porter, Barry (Wirral S)


Hughes, Robert G (Harrow W)
Porter, David (Waveney)


Hunt, Rt Hon David (Wirral W)
Portillo, Rt Hon Michael


Hunt, Sir John (Ravensbourne)
Powell, William (Corby)


Hunter, Andrew
Rathbone, Tim


Hurd, Rt Hon Douglas
Redwood, Rt Hon John


Jack, Michael
Renton, Rt Hon Tim


Jackson, Robert (Wantage)
Riddick, Graham


Jenkin, Bernard
Robathan, Andrew


Jessel, Toby
Roberts, Rt Hon Sir Wyn


Johnson Smith, Sir Geoffrey
Robertson, Raymond (Ab'd'n S)


Jones, Gwilym (Cardiff N)
Robinson, Mark (Somerton)


Jones, Robert B (W Hertfdshr)
Roe, Mrs Marion (Broxbourne)


Jopling, Rt Hon Michael
Rowe, Andrew (Mid Kent)


Kellett-Bowman, Dame Elaine
Rumbold, Rt Hon Dame Angela


King, Rt Hon Tom
Sackville, Tom


Kirkhope, Timothy
Sainsbury, Rt Hon Sir Timothy


Knapman, Roger
Scott, Rt Hon Sir Nicholas


Knight, Mrs Angela (Erewash)
Shaw, Sir Giles (Pudsey)


Knight, Rt Hon Greg (Derby N)
Shephard, Rt Hon Gillian


Knight, Dame Jill (Bir'm E'st'n)
Shepherd, Colin (Hereford)


Knox, Sir David
Shepherd, Richard (Aldridge)


Kynoch, George (Kincardine)
Shersby, Sir Michael


Lait, Mrs Jacqui
Sims, Roger


Lang, Rt Hon Ian
Skeet, Sir Trevor


Lawrence, Sir Ivan
Smith, Sir Dudley (Warwick)


Legg, Barry
Smith, Tim (Beaconsfield)


Lennox-Boyd, Sir Mark
Smyth, The Reverend Martin


Lester, Jim (Broxtowe)
Soames, Nicholas


Lidington, David
Speed, Sir Keith


Lightbown, Sir David
Spencer, Sir Derek


Lloyd, Rt Hon Sir Peter (Fareham)
Spicer, Sir James (W Dorset)


Lord, Michael
Spicer, Michael (S Worcs)


Luff, Peter
Spink, Dr Robert


MacKay, Andrew
Spring, Richard


Maclean, Rt Hon David
Sproat, Iain


McLoughlin, Patrick
Squire, Robin (Hornchurch)


McNair-Wilson, Sir Patrick
Stanley, Rt Hon Sir John


Madel, Sir David
Steen, Anthony


Maitland, Lady Olga
Stephen, Michael


Malone, Gerald
Stem, Michael


Mans, Keith
Stewart, Allan


Marland, Paul
Streeter, Gary


Marlow, Tony
Sumberg, David


Marshall, John (Hendon S)
Sweeney, Walter


Marshall, Sir Michael (Arundel)
Sykes, John


Martin, David (Portsmouth S)
Tapsell, Sir Peter


Mates, Michael
Taylor, Ian (Esher)






Taylor, John M (Solihull)
Waterson, Nigel


Temple-Morris, Peter
Watts, John


Thomason, Roy
Wells, Bowen


Thompson, Patrick (Norwich N)
Wheeler, Rt Hon Sir John


Thornton, Sir Malcolm
Whitney, Ray


Thurnham, Peter
Whittingdale, John


Townend, John (Bridlington)
Widdecombe, Ann


Townsend, Cyril D (Bexl'yh'th)
Wiggin, Sir Jerry


Tracey, Richard
Wilkinson, John


Tredinnick, David
Willetts, David


Trend, Michael
Wilshire, David


Twinn, Dr Ian
Winterton, Mrs Ann (Congleton)


Vaughan, Sir Gerard
Winterton, Nicholas (Macc'f'ld)


Viggers, Peter
Wolfson, Mark


Waldegrave, Rt Hon William
Wood, Timothy


Walden, George
Yeo, Tim


Walker, Bill (N Tayside)



Waller, Gary
Tellers for the Noes:


Ward, John
Mr. Derek Conway and


Wardle, Charles (Bexhill)
Mr. Michael Bates.

Question accordingly negatived.

Amendment proposed, at the end of the Question, to add,

But humbly regret that the Gracious Speech fails to set out adequate proposals to secure investment in people through education, to reform Britain's discredited system of government or to build for the country's long-term future through investment in housing and transport; and further regret that measures outlined in the Gracious Speech on housing and immigration risk adding to the divisions in society.—[Mr. Ashdown.]

Question put forthwith, pursuant to Standing Order No. 32 (Calling of amendments at end of debate), That the amendment be made:—

The House divided: Ayes 32, Noes 297.

Division No. 3]
[10.16 pm


AYES


Alton, David
Maddock, Diana


Ashdown, Rt Hon Paddy
Mahon, Alice


Barnes, Harry
Marek, Dr John


Beith, Rt Hon A J
Michie, Bill (Sheffield Heeley)


Bruce, Malcolm (Gordon)
Michie, Mrs Ray (Argyll & Bute)


Campbell, Menzies (Fife NE)
Rendel, David


Carlile, Alexander (Montgomery)
Salmond, Alex


Chidgey, David
Skinner, Dennis


Corbyn, Jeremy
Steel, Rt Hon Sir David


Cunningham, Roseanna
Taylor, Matthew (Truro)


Davies, Chris (L'Boro & S'worth)
Tyler, Paul


Ewing, Mrs Margaret
Wallace, James


Foster, Don (Bath)
Welsh, Andrew


Harvey, Nick
Wise, Audrey


Johnston, Sir Russell



Jones, Nigel (Cheltenham)
Tellers for the Ayes:


Kennedy, Charles (Ross,C&S)
Mr. Archy Kirkwood and


Lynne, Ms Liz
Mr. Simon Hughes.




NOES


Ainsworth, Peter (East Surrey)
Baldry, Tony


Aitken, Rt Hon Jonathan
Banks, Matthew (Southport)


Alexander, Richard
Banks, Robert (Harrogate)


Alison, Rt Hon Michael (Selby)
Batiste, Spencer


Amess, David
Bellingham, Henry


Arbuthnot, James
Bendall, Vivian


Arnold, Jacques (Gravesham)
Beresford, Sir Paul


Arnold, Sir Thomas (Hazel Grv)
Biffen, Rt Hon John


Ashby, David
Bonsor, Sir Nicholas


Atkins, Rt Hon Robert
Booth, Hartley


Atkinson, David (Bour'mouth E)
Boswell, Tim


Atkinson, Peter (Hexham)
Bottomley, Peter (Eltham)


Baker, Rt Hon Kenneth (Mole V)
Bottomley, Rt Hon Virginia


Baker, Nicholas (North Dorset)
Bowis, John





Boyson, Rt Hon Sir Rhodes
Gorst Sir John


Brandreth, Gyles
Grant, Sir A (SW Cambs)


Brazier, Julian
Greenway, Harry (Ealing N)


Bright, Sir Graham
Greenway, John (Ryedale)


Brooke, Rt Hon Peter
Griffiths, Peter (Portsmouth, N)


Brown, M (Brigg & Cl'thorpes)
Grylls, Sir Michael


Browning, Mrs Angela
Gummer, Rt Hon John Selwyn


Bruce, Ian (Dorset)
Hague, Rt Hon William


Budgen, Nicholas
Hamilton, Sir Archibald


Burns, Simon
Hamilton, Neil (Tatton)


Burt, Alistair
Hampson, Dr Keith


Butcher, John
Hanley, Rt Hon Jeremy


Butler, Peter
Hannam, Sir John


Butterfill, John
Hargreaves, Andrew


Carlisle, John (Luton North)
Harris, David


Carlisle, Sir Kenneth (Lincoln)
Haselhurst, Sir Alan


Carrington, Matthew
Hawkins, Nick


Carttiss, Michael
Hawksley, Warren


Cash, William
Hayes, Jerry


Channon, Rt Hon Paul
Heald, Oliver


Chapman, Sir Sydney
Heath, Rt Hon Sir Edward


Churchill, Mr
Heathcoat-Amory, David


Clark, Dr Michael (Rochford)
Hendry, Charles


Clarke, Rt Hon Kenneth (Ru'clif)
Hicks, Robert


Clifton-Brown, Geoffrey
Higgins, Rt Hon Sir Terence


Coe, Sebastian
Hill, James (Southampton Test)


Congdon, David
Hogg, Rt Hon Douglas (G'tham)


Coombs, Anthony (Wyre For'st)
Horam, John


Coombs, Simon (Swindon)
Hordern, Rt Hon Sir Peter


Cope, Rt Hon Sir John
Howell, Rt Hon David (G'dford)


Cormack, Sir Patrick
Howell, Sir Ralph (N Norfolk)


Couchman, James
Hughes, Robert G (Harrow W)


Cran, James
Hunt, Rt Hon David (Wirral W)


Currie, Mrs Edwina (S D'by'ire)
Hunt, Sir John (Ravensbourne)


Curry, David (Skipton & Ripon)
Hunter, Andrew


Davies, Quentin (Stamford)
Hurd, Rt Hon Douglas


Day, Stephen
Jack, Michael


Deva, Nirj Joseph
Jackson, Robert (Wantage)


Devlin, Tim
Jenkin, Bernard


Dorrell, Rt Hon Stephen
Jessel, Toby


Douglas-Hamilton, Lord James
Johnson Smith, Sir Geoffrey


Dover, Den
Jones, Gwilym (Cardiff N)


Duncan-Smith, Iain
Jones, Robert B (W Hertfdshr)


Dunn, Bob
Jopling, Rt Hon Michael


Durant, Sir Anthony
Kellett-Bowman, Dame Elaine


Eggar, Rt Hon Tim
King, Rt Hon Tom


Elletson, Harold
Kirkhope, Timothy


Emery, Rt Hon Sir Peter
Knapman, Roger


Evans, David (Welwyn Hatfield)
Knight, Mrs Angela (Erewash)


Evans, Jonathan (Brecon)
Knight, Rt Hon Greg (Derby N)


Evans, Nigel (Ribble Valley)
Knight, Dame Jill (Bir'm E'st'n)


Evans, Roger (Monmouth)
Knox, Sir David


Evennett, David
Kynoch, George (Kincardine)


Faber, David
Lait, Mrs Jacqui


Fabricant, Michael
Lang, Rt Hon Ian


Fenner, Dame Peggy
Lawrence, Sir Ivan


Field, Barry (Isle of Wight)
Legg, Barry


Fishburn, Dudley
Leigh, Edward


Forman, Nigel
Lennox-Boyd, Sir Mark


Forsyth, Rt Hon Michael (Stirling)
Lester, Jim (Broxtowe)


Forth, Eric
Lidington, David


Fowler, Rt Hon Sir Norman
Lightbown, Sir David


Fox, Dr Liam (Woodspring)
Lloyd, Rt Hon Sir Peter (Fareham)


Fox, Sir Marcus (Shipley)
Lord, Michael


Freeman, Rt Hon Roger
Luff, Peter


French, Douglas
McCrea, The Reverend William


Fry, Sir Peter
MacKay, Andrew


Gale, Roger
Maclean, Rt Hon David


Gallie, Phil
McLoughlin, Patrick


Garel-Jones, Rt Hon Tristan
McNair-Wilson, Sir Patrick


Garnier, Edward
Madel, Sir David


Gill, Christopher
Maitland, Lady Olga


Gillan, Cheryl
Malone, Gerald


Goodlad, Rt Hon Alastair
Mans, Keith


Goodson-Wickes, Dr Charles
Marland, Paul


Gorman, Mrs Teresa
Marlow, Tony






Marshall, John (Hendon S)
Smyth, The Reverend Martin


Marshall, Sir Michael (Arundel)
Soames, Nicholas


Martin, David (Portsmouth S)
Speed, Sir Keith


Mates, Michael
Spencer, Sir Derek


Mawhinney, Rt Hon Dr Brian
Spicer, Sir James (W Dorset)


Mellor, Rt Hon David
Spicer, Michael (S Worcs)


Merchant, Piers
Spink, Dr Robert


Mills, Iain
Spring, Richard


Mitchell, Andrew (Gedling)
Sproat, Iain


Mitchell, Sir David (NW Hants)
Squire, Robin (Hornchurch)


Moate, Sir Roger
Stanley, Rt Hon Sir John


Molyneaux, Rt Hon James
Steen, Anthony


Monro, Rt Hon Sir Hector
Stephen, Michael


Montgomery, Sir Fergus
Stern, Michael


Neednam, Rt Hon Richard
Stewart, Allan


Neubert, Sir Michael
Streeter, Gary


Newton, Rt Hon Tony
Sumberg, David


Nicholls, Patrick
Sweeney, Walter


Nicholson, David (Taunton)
Sykes, John


Nicholson, Emma (Devon West)
Tapsell, Sir Peter


Norris, Steve
Taylor, Ian (Esher)


Onslow, Rt Hon Sir Cranley
Taylor, John M (Solihull)


Oppenheim, Phillip
Temple-Morris, Peter


Ottaway, Richard
Thomason, Roy


Page, Richard
Thompson, Patrick (Norwich N)


Paice, James
Thornton, Sir Malcolm


Patrick, Sir Irvine
Thurnham, Peter


Patten, Rt Hon John
Townend, John (Bridlington)


Pattie, Rt Hon Sir Geoffrey
Townsend, Cyril D (Bexl'yh'th)


Pawsey, James
Tracey, Richard


Peacock, Mrs Elizabeth
Tredinnick, David


Pickles, Eric
Trend, Michael


Porter, Barry (Wirral S)
Twinn, Dr Ian


Porter, David (Waveney)
Vaughan, Sir Gerard


Portillo, Rt Hon Michael
Viggers, Peter


Powell, William (Corby)
Waldegrave, Rt Hon William



Walden, George


Rathbone, Tim
Walker Bill (N Tayside)


Redwood, Rt Hon John
Waller, Gary


Renton, Rt Hon Tim
Ward, John


Richards, Rod
Wardle, Charles (Bexhill)


Riddick, Graham
Waterson, Nigel


Robathan, Andrew
Watts, John


Roberts, Rt Hon Sir Wyn
Wells, Bowen


Robertson, Raymond (Ab'd'n S)
Wheeler, Rt Hon Sir John


Robinson, Mark (Somerton)
Whitney, Ray


Roe, Mrs Marion (Broxbourne)
Whittingdale, John


Rowe, Andrew (Mid Kent)
Widdecombe, Ann


Rumbold, Rt Hon Dame Angela
Wiggin, Sir Jerry


Sackville, Tom
Wilkinson, John


Sainsbury, Rt Hon Sir Timothy
Willetts, David


Scott, Rt Hon Sir Nicholas
Wilshire, David


Shaw, Sir Giles (Pudsey)
Winterton, Mrs Ann (Congleton)


Shephard, Rt Hon Gillian
Winterton, Nicholas (Macc'fld)


Shepherd, Colin (Hereford)
Wolfson, Mark


Shepherd, Richard (Aldridge)
Wood, Timothy


Shersby, Sir Michael
Yeo, Tim


Sims, Roger



Skeet, Sir Trevor
Tellers for the Noes:


Smith, Sir Dudley (Warwick)
Mr. Derek Conway and


Smith, Tim (Beaconsfield)
Mr. Michael Bates.

Question accordingly negatived.

Main Question put and agreed to.

Resolved,

That an humble Address be presented to Her Majesty, as follows:—

Most Gracious Sovereign,

We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.

Orders of the Day — BUSINESS OF THE HOUSE

Ordered,
That, at the sitting on Tuesday 5th December, the Speaker shall put forthwith the Questions necessary to dispose of proceedings on the Motion in the name of the Prime Minister relating to public expenditure, including the Question on any amendment thereto which she may have selected, and the said Questions may be decided after the expiry of the time for opposed business.—[Mr. Willetts.]

PETITION

Deeping Bypass

Mr. Quentin Davies: I beg to present a petition signed by 6,000 inhabitants of the villages of Market Deeping and Deeping St. James in my constituency, which begs for the rapid construction of the Deeping bypass, which I have had occasion to mention in the House before. We have been waiting for the bypass since 1939, when the idea was mooted. It was in the 1989 Government road programme, but was removed from that programme in 1993 because of public expenditure cuts. We very much hope that it will be constructed in the new future, because it is vital not merely for the economy and the amenity of my constituents but also for their safety. Over the past two months there have been three serious accidents, with one fatality, in an area that would be bypassed if the bypass were constructed.

I hope that the voices of those 6,000 of my constituents, who represent more than three quarters of the adult population of the two villages concerned, will be heard in the right quarter in the way that they deserve.

To lie upon the Table.

Social Services (Lancashire)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Bates.]

Mr. Harold Elletson: I am grateful for the opportunity to discuss the provision of social services in Lancashire. There has been much debate recently about the implementation of the community care reforms, and about the way in which local authorities have met their responsibilities for the management of social services.
There has been widespread support on both sides of the House for the concept of care in the community, and there is no doubt that it was the right policy, and that the Government were right to implement it. Like most hon. Members, I fully support the concept of offering choice to service users, to enable them to live in their own homes wherever possible and to allow them a greater say in how they live their lives.
It is now just over two years since implementation of the reforms began, and clearly it has been a much greater success in some parts of the country than in others. Tonight I shall concentrate on the local situation in Lancashire, and examine the extent to which the county council has met the challenge of care in the community and fulfilled its new responsibilities. I have to say that it is a far from happy story, and that Lancashire's experience has been a catalogue of incompetence, mismanagement and, in consequence, utterly avoidable misery.

Mr. Nick Hawkins: Does my hon. Friend agree that it is probably owing to the total incompetence of the Lancashire county council Labour group that not only has no Lancashire Labour Member bothered to be here for the debate but that there is only one Labour Member in the Chamber at all—the hon. Member for Motherwell, North (Dr. Reid)—and even he is here by mistake?

Mr. Elletson: As usual, my hon. Friend makes an extremely good point, and I am sure that it was not lost on my other hon. Friends, or on the representatives of the press in the Gallery.
First, let me dispel the myth cynically propagated by the Labour leadership at county hall—that Lancashire's woes are the result of Government underfunding. As my hon. Friends, including the Minister, all know, Lancashire's Labour councillors are experts in black propaganda and in the techniques of twisting and manipulating statistics to distort the truth. They are also compulsive spenders, with a disgraceful record of wasting public money on bureaucracy.

Dame Elaine Kellett-Bowman: Lancashire Labour councillors may be compulsive spenders on things other than education, but on education they are compulsive underspenders.

Mr. Elletson: I agree absolutely with my hon. Friend. Perhaps we could discuss education in another Adjournment debate on another day, because that is an equally important and urgent topic.
There is nothing that Lancashire county councillors would like more than to blame their misfortunes on the

Government—and, of course, in a local election year that is exactly what they have been trying to do. However, the truth is very different.
The total amount available to Lancashire county council to spend on social services has consistently increased since 1990–91, when total funding of social services was £92 million. In 1993–94, £147 million was available to the county council to spend on personal social services; in 1994–95, £169 million was available, and in 1995–96 there is £185 million available. The sum that Lancashire county council received last year to spend on social services represented an increase of £22.6 million on the previous year.
The truth is that there has been a continuous year-on-year increase in the resources available, yet Lancashire's mismanagement of the funding available has left it in an appalling predicament. In 1993–94 the county council recorded an underspend on the social services budget of £6.3 million and, despite the recommendation of the Conservative group on the council that the amount be carried forward, Labour refused to do that, and decided instead to build up the balances.
Last year, the council got itself into a position where it was faced with a possible overspend of £14 million, so it decided to threaten elderly and disabled people with the withdrawal of their home help services.

Dame Elaine Kellett-Bowman: It was to happen overnight.

Mr. Elletson: I agree with my hon. Friend. I am sure that all my hon. Friends remember that letters were sent from county hall which terrified some of Lancashire's most vulnerable citizens. This year, the draconian cuts will be implemented because the county council cannot manage the available resources. It cannot balance the books, and it is spending above the level of its personal social services standard spending assessment. Once again, the Labour-controlled council blames a reduction in Government funding.

Mr. Nigel Evans: Does my hon. Friend agree that the council's inept handling of its budget has meant that people who receive only one hour a week of home help have received letters from the county council to say that that one hour's help is to be removed? Does he agree that the county council has stated to the most vulnerable people in society that their money and help are to taken away from them, and does he further agree that those people will suffer because of that?

Mr. Elletson: I agree with my hon. Friend, and I know that his constituency postbag is as full as mine. My postbag is filled with letters from constituents who have to face reductions in social services such as respite care and home help. Many people, such as people with learning difficulties, now face an increase in their charges for non-residential services.
Many cases have been drawn to my attention by people who are at a complete loss as to what to do. It is difficult to single out one case among all those to draw to the Minister's attention tonight, but let me tell him about Geraldine Robinson. Geraldine's picture appeared on the front cover of a Lancashire county council leaflet advertising the care services that it proudly claims it provides to people in the community.
Geraldine is a young woman who suffers from cerebral palsy. She was fully assessed by Lancashire county council social services in March 1994, and a care package designed specifically for her was finalised in June that year, which provided her with a cost-effective, 24-hour care service package. It enabled her to live an independent life in the community, and it had been based on an assessment of her clinical needs—just as the Government intended. Yet in June of this year, Lancashire county council, which was the author, the House may remember, of the leaflet showing Geraldine's picture and claiming to be able to cater for her needs, told her that her care package would be cut from £700 to £300 a week—not reduced, not trimmed, but cut by more than a half.
Despite several attempts by Geraldine and her carers to question why this decision had been taken, no answer has yet been forthcoming. I can only conclude—as any reasonable person would—that Geraldine is another casualty of the council's inability to manage its resources and keep within its budget.

Mr. Colin Pickthall: Will the hon. Gentleman give way?

Mr. Elletson: No, I will not give way to the hon. Gentleman, as I have given way three times already. Normally, there would have to be a reassessment before a care package was reduced, but that did not happen. The council said that its only alternative to reducing her care package would be to force Geraldine into residential care. Of course, she is extremely distressed about that. She has been trying to build a life for herself in the community, and she was encouraged by the county council to live independently, and even to move to a two-bedroomed property to allow more space for her carers.
Geraldine has overcome many personal tragedies, including the death of her fiancé in December 1993, but now the county council is turning on her the full pressure of its callous and insensitive bureaucracy. The social services department's actions in the past year have had a massive impact on Geraldine's life. She now has to undergo another comprehensive reassessment at a level the council is unwilling to identify, despite the fact that no significant major change in circumstances or Geraldine's needs or condition has occurred. That is not care in the community, or giving disabled and vulnerable people a greater say in their own lives. That is not enabling people to live in their own home. It is the incompetence of a county administration that has failed miserably to discharge its responsibilities to its most vulnerable citizens.
If the money is not to be spent on people such as Geraldine, where is it to go? I want to know what the priorities of Lancashire social services departments are. Let us look at the case of another young woman far less deserving and needy than Geraldine. She is a constituent of my right hon. Friend the Member for South Ribble (Mr. Atkins). Lancashire county council managed to find £2,000 a week for a course of remedial treatment so that she could go on a three-month riding course in Ireland and spend a considerable time in Australia—all, of course, in the company of social workers.

Mr. Robert Atkins: Is my hon. Friend aware that, at the same time, the county council was prepared to close a home called Meadowcroft in my constituency which provided superb care for young

women who would not otherwise get the sort of care that they needed, in favour of keeping open a home in Liverpool—outside the county council area? The closure has caused great distress to many of my constituents and many of those associated with Meadowcroft, at the same time as wasting the sort of money that my hon. Friend has mentioned in the context of one case.

Mr. Elletson: I have heard of the case that my hon. Friend mentions. It is an equally disgraceful example of the misallocation of resources.
Perhaps the main priority of the social services department is to fund the ever-increasing numbers of administrators and bureaucrats in county hall. In the last financial year the social services department employed 203 extra members of staff. That was undoubtedly to deal with the appalling chaos that the department has created by its mismanagement of the assessment procedures. What is even more ironic—this whole sorry tale is a web of ironies—having taken on all the extra staff, the council now finds that it cannot pay them to do anything. I am sure that my hon. Friends will have noticed that today's Lancashire Evening Post tells us that social services workers are being told not to visit clients because the county council cannot afford their mileage.
The worst damage being done is to the people who could make a real success of care in the community—those in the private sector and the voluntary services. Lancashire county council has consistently favoured placement of clients in council-run residential homes over placement in independently run homes, even though the private sector can provide the same or a better quality of service at a lower price. Many of my colleagues have joined me in correspondence with the Lancashire Care Association, which represents more than 400 independent care providers across the county. Its members employ more than 15,000 staff and care for more than 10, 000 people.
The Lancashire Care Association tells me that the county council social services department has a written policy that all domiciliary services should be offered in-house before being offered to the private sector. If that is true, it is absolutely disgraceful. I hope that the Minister will ensure that the social services inspectorate fully investigates that claim as early as possible.
Let us take a moment to consider the financial implications of Lancashire county council's policy. The cost of placements in, for example, part III social services homes, is £100 per week more than placements in the private sector. The cost of council-run domiciliary services ranges between £11.20 and £17 an hour, but all private sector services are priced between £5.75 and £6 per hour, which is a massive saving on in-house costs.

Dame Elaine Kellett-Bowman: Is that not a case for the district auditor?

Mr. Elletson: My hon. Friend has a good point. It is clear that substantial savings could be made if the council made better use of the private sector. Possibly as much as £10 million a year in the residential care sector and £4.5 million in the domiciliary care sector could be saved, yet the council appears to have no intention of using the private care sector. When the chairman of the social services committee, Councillor Mrs. Humble, took part in a programme on a local radio station and was asked by members of the Lancashire Care Association about the


possibility of buying more private non-residential care services, she told them—wait for it, my hon. Friends will not believe it—that she was not prepared to put local authority staff jobs in jeopardy.
Does her concern for local authority bureaucrats justify such a prolific waste of taxpayer's money? Why does she not care about the jobs of workers in the private sector? What is wrong with them? Perhaps she should start thinking about the 15,000 employees of the various members of the Lancashire Care Association, who do a fantastic job, which day by day she makes more difficult.

Dr. John Reid: Will the hon. Gentleman give way?

Mr. Elletson: No, because I have given way a record five times in an Adjournment debate.
Lancashire social services department has issued its community care plan for 1997–97, which shows that costly in-house services will continue to be favoured. While that policy continues, the private sector struggles to remain solvent and service users' choices are severely restricted.
An integral part of the reforms was the requirement that a large percentage of the available funds would be spent on residential, day or domiciliary services, provided by the private and voluntary sector. That was to ensure that authorities could not build monopoly empires of their own and to encourage the growth of a healthy, energetic private sector, which was ready to meet the challenge of care in the community, with high-quality, cost-effective care packages.
The new system was designed to encourage local authorities to contract services out and to make more use of the independent sector. That clearly has not happened in Lancashire. Private carers are being forced out of business and service users are being driven into the clutches of Lancashire county council. That is the very opposite of everything for which we hoped from care in the community, and I hope that my hon. Friend will consider carefully the amounts that the county council is spending in the private sector and ask the social services inspectorate to consider whether that really meets the objectives of care in the community.
I am grateful to my hon. Friend the Under-Secretary for agreeing to reply to the debate. I know that he has been consistently bombarded with complaints about Lancashire county council and that he might feel that his hands are tied. Nevertheless, the situation in Lancashire is now so chaotic that it merits his special attention and a determined effort by the Government to intervene and protect service users and providers.
My hon. Friend the Under-Secretary and my hon. Friends may find some small amount of black humour in this final twist of irony. They may have heard that the leader of Lancashire county council, Councillor Louise Ellman, has been selected for a so-called safe Labour seat on Merseyside and hopes to join us here on these green Benches. I hear my hon. Friends asking who will replace her as the leader of the Labour group on Lancashire county council and I think I heard the hon. Member for Motherwell, North (Dr. Reid) mention a name.
Why, it is none other than the author of this great disaster. Step forward the woman who has presided over that colossal orgy of incompetence—none other than the

chairman of the social services committee, Councillor Mrs. Joan Humble. I just hope that the people of Lancashire understand what a nightmare of bureaucracy, sloppy management and cynicism they will face if she ever gets control of the rest of Lancashire's services.

The Parliamentary Under-Secretary of State for Health (Mr. John Bowis): I thank my hon. Friend the Member for Blackpool, North (Mr. Elletson) for introducing this short debate on Lancashire's social services and congratulate him on bringing with him the Lancashire light infantry from Ribble Valley, Blackpool, South, Fylde, South Ribble, Wyre and, indeed, from Lancaster. They are light on their feet, as well as infantry in his support.
In most parts of the country, community care is a success story. We have been moving on with our plans, through our community care development programme. Our Community Care (Direct Payments) Bill was introduced in another place last week. In April, we will be moving through our community care charters and, from April, the Carers (Recognition and Services) Act 1995 will come into force, giving carers a legal right to have their views and circumstances taken into account when the person being cared for receives a community care assessment.
The common thread running through all those developments is that they are designed to increase user and carer choice and control. They are all examples of way in which the Government are pushing forward the implementation of the community care reforms to get us closer to achieving fully the aims of "Caring for People".
We are committed to providing people with increased choice in the type of service that they receive and in the way in which the services are delivered.

Mr. Keith Mans: I apologise for asking a question so early in my hon. Friend's speech. He well knows that, a couple of months after the start of care in the community, nearly three years ago, I told him about what was going on in Lancashire. I fully understand that, at the time, he felt that he had to wait a little longer to discover whether it was true. On the ground, we can now see the suffering of many constituents—my own and those of other hon. Members in Lancashire, as a result of three years of incompetent management. There must be a way for central Government to intervene. If there is not, it is a sad day for the people of Lancashire who, need the care to which they are entitled.

Mr. Bowis: I am grateful for that intervention. If my hon. Friend will bear with me, I will try to respond to the points that he and my other hon. Friends have made.
It is disturbing to hear of cases where the involvement of users and carers, and the possibility of choice, is being denied. It is right to involve user and carers, listen to what they say and take note of it, to give them choices wherever possible, and to ensure that they know what choices they have.
My hon. Friend the Member for Blackpool, North mentioned the case of Geraldine Robinson. I am grateful to him for letting me have information about her. He has explained that Geraldine Robinson and her parents are upset at the way in which Lancashire has carried out


assessments and reassessments and are concerned that her care package may be reduced. Local authorities have the responsibility for assessing people's needs and deciding what services are appropriate to meet those needs. We have advised local authorities to carry out reviews of assessment systematically and regularly. We have not said how often reviews should take place or exactly how they should be done because the appropriate frequency and level of review will vary from case to case, depending on individual circumstances.
I understand that Miss Robinson's father lodged a complaint with the social services department about the way that it was carrying out its reviews. As a result, it was agreed that an assessment interview should be carried out by someone who had had no previous contact with Miss Robinson. I am told that that interview took place on Tuesday of last week and that Lancashire has not to date made any proposal to alter her care package as a result of that assessment. Clearly, Lancashire should conduct its reviews in a way which not only meets its service requirements but which is sensitive to Miss Robinson's situation and views. I intend to ask my officials to look into the current position on this case, and I shall come back to my hon. Friend the Member for Blackpool, North on that.

Mr. Pickthall: rose—

Mr. Bowis: I think that the tradition is to give way in Adjournment debates only to those who have previously agreed it with the Member who has obtained the debate and the responding Minister. I have given way to everyone who falls into that category.

Dr. Reid: On a point of order, Madam Deputy Speaker. How can we possibly have a debate when only one side of the argument is heard?

Mr. Robert Atkins: It is an Adjournment debate.

Dr. Reid: A debate, by definition, involves two sides of an argument. How can it be in order to have a debate where the convention is that only side of the argument is heard?

Madam Deputy Speaker: This is an Adjournment debate. By tradition, it involves the Member who raises the subject and the Minister who answers. Any other speaker is by courtesy of both.

Mr. Bowis: It is not unreasonable to expect adults who are able to make contributions for non-residential services to do so, but local authorities have discretion to make charges for non-residential services. They decide whether to make them, what level they should be at and on any exemptions or discounts for different categories of users. Any charges must be reasonable and affordable.
If people with learning difficulties in Lancashire are being charged, that is absolutely and entirely at the discretion and decision of the elected leaders of Lancashire county council and it has nothing to do with the Government. Nothing from the Government requires that such charges must be made. I hope that that message will go back to those people.
Extending choice means extending the range of services and improving their cost-effectiveness so that more and better services can be delivered. There is a flourishing

independent sector for residential care and nursing homes and a growing range of day and domiciliary services provided by the independent sector. As my hon. Friend says, they offer the opportunity for local authorities to secure quality services at a competitive cost. All over the country, this opportunity is being seized but not, apparently, in Lancashire. I wonder why.
As my hon. Friend said, the Lancashire Homes Association has estimated that the county council could save £10.8 million a year if it made full use of the independent sector, such is the level of inefficiency in its own homes. Potential savings from the full use of the independent sector have been put at 14 million annually. That is money that could be invested in more care for more people. Some months ago, I went to the county council in Preston and put those figures to the leader of the council and the chairman of social services. To this day, they have not disputed or denied them. Instead of using all the means at its disposal to get more care for more people, the county council still, as we hear, gives first call to its in-house domiciliary and residential services.
Local authorities asked for and were given the responsibility for community care, for assessing the needs of individuals and for deciding on the appropriate services to meet those needs. They must now deliver, and local people will watch the way in which they are doing.
My hon. Friend has posed the question, reinforced by my hon. Friend the Member for Wyre, about what can be done. A lot can be done by publicising the decisions that are being taken—or not being taken. As a result of the concerns expressed in this debate today and generally, I intend to ask the chief inspector of social services to provide me with a full report on the position in Lancashire so that I can then decide whether further action by central Government is appropriate.
The primary responsibility for community care implementation lies with local authorities. They must answer to their local populations for their decisions and the results that those decisions have on the elderly and vulnerable people for whom they are supposed to care. The people of Lancashire will want to ask the elected leaders of their county council about the delivery of community care in their area. They will want to ask about choice, about value for money and about the way in which the authority is seeking to involve them, or not, to listen, or not, and to meet their needs, or not.

Mr. Hawkins: Will my hon. Friend ensure that in the inquiry, which all Conservative Members here are delighted he has announced tonight, evidence is taken from the senior and experienced general practitioners in our constituencies? They are aware of how often good, sensible decisions about the best place and the best way in which to care for the elderly and vulnerable are being contradicted by social workers who do not know what they are doing and who do not care.

Mr. Bowis: I shall look at that possibility. I hope that, in any case, my hon. Friend will ensure that the information that can come from the experience of general practitioners—I have heard some of it directly when I have been in Blackpool—is given to me so that it can be passed on to the chief inspector and his team.
The people of Lancashire will want to know why money is wasted on state provision when better and cheaper services are available from independent homes


and agencies. They will want to know why Lancashire's councillors prefer to support the state sector so that less money is available for home helps, respite care and other services to support vulnerable and needy people. They will want to know what Lancashire has done with the £92 million that the taxpayers have given it for social services

this year; the amount has been doubled since 1990–91. I, my hon. Friends here tonight and, much more importantly, the people of Lancashire want to know the answer to that question, and they have a right to be told.

Question put and agreed to.

Adjourned accordingly at two minutes to Eleven o'clock.